This paper proposes a novel way of modeling heterogeneity in the context of environmental performance estimation when using Data Envelopment Analysis. In the recent literature estimation of productive efficiency is common and relies on inputs and outputs identifying an environmental production technology in cases of joint production of good and bad outputs. However, heterogeneity is an important issue in this context. Our proposed novel approach relies on identification of different groups using a multivariate mixture-of-normals-distribution.
