Productivity Analyses of Iranian Power Plant with Environmental Criterion

Productivity of Iranian electric industry with environmental criterion is measured in this study. Adjusted total factor productivity growth rate using Malmquist Index are calculated for 1981-2005. The result indicates that including the pollution abatement activities has a measurable effect on the productivity. Comparison of the productivity shows that the mean productivity with and without environmental criterion were 0.971 and 1.025, respectively. Statistical comparison of the mentioned productivity using Mann-Whitney test reveals that this difference is significant. So it is necessary to use environmental criteria for measuring efficiency and productivity in pollutant industries.