Sustainability assessment using DEA
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Sustainability assessment using DEA book
In this chapter, a composite index is derived, formed as an aggregate of three sub-indices to represent project returns, environmental impacts and social effects, in the absence of a priori dominance of any capital form. The sustainability of project is benchmarked against a best- and worst- practice project and the weights of the component indices are derived using only the project portfolio data. Two methods of evaluating the financial and non-financial impacts of a project simultaneously include direct risk assessment such as cost-effectiveness analysis and multi-criteria decision analysis. Relative efficiency analysis across the projects using a first stage data envelopment analysis (DEA) estimation procedure compels us to investigate 'efficiency gaps' in the project efficiency results. To compute the composite index, an output-oriented DEA model combined with an input-oriented DEA model is used and an assumption of constant returns-to-scale is made.