Environment-adjusted total-factor energy efficiency of Taiwan's service sectors

Chin Yi Fang, Jin Li Hu*, Tze Kai Lou

*Corresponding author for this work

Research output: Contribution to journalArticlepeer-review

37 Citations (Scopus)


This study computes the pure technical efficiency (PTE) and energy-saving target of Taiwan's service sectors during 2001-2008 by using the input-oriented data envelopment analysis (DEA) approach with the assumption of a variable returns-to-scale (VRS) situation. This paper further investigates the effects of industry characteristics on the energy-saving target by applying the four-stage DEA proposed by Fried et al. (1999). We also calculate the pre-adjusted and environment-adjusted total-factor energy efficiency (TFEE) scores in these service sectors. There are three inputs (labor, capital stock, and energy consumption) and a single output (real GDP) in the DEA model. The most energy efficient service sector is finance, insurance and real estate, which has an average TFEE of 0.994 and an environment-adjusted TFEE (EATFEE) of 0.807. The study utilizes the panel-data, random-effects Tobit regression model with the energy-saving target (EST) as the dependent variable. Those service industries with a larger GDP output have greater excess use of energy. The capital-labor ratio has a significantly positive effect while the time trend variable has a significantly negative impact on the EST, suggesting that future new capital investment should also be accompanied with energy-saving technology in the service sectors.

Original languageEnglish
Pages (from-to)1160-1168
Number of pages9
JournalEnergy Policy
Publication statusPublished - 2013 Dec


  • Data envelopment analysis
  • Environment-adjusted total-factor energy efficiency (EATFEE)
  • Panel random-effects Tobit regression

ASJC Scopus subject areas

  • General Energy
  • Management, Monitoring, Policy and Law


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