The rapid economic growth of China in the last twenty years has caused a commensurate rise in atmospheric pollution which has had an impact on both the environment and public health. Since 2013, SO₂, CO₂ and nitrogen oxide levels have reached a level that may cause climate change and have adverse effects on the health of the local residents. Past environmental efficiency analyses have rarely examined economic development, air pollution and health as interacting systems; therefore, this study used a new two-stage DEA model, the Modified Undesirable EBM Two Stage DEA (Epsilon-Based Measure) to explore the environmental, economic and health efficiencies in thirty-one major cities in China. The results were as follows: while all cities needed to improve their GDP, the environmental efficiencies were continuing to rise in most cities. The health efficiency index indicated that disease efficiency had increased in most cities but declined in one third; therefore, it is necessary to strengthen treatment. The respiratory disease treatment efficiency in most cities was rising, and the room for improvement had significantly reduced. There were improvements in the mortality rate in 15 cities; however, the mortality rate treatment efficiency declined in 11 cities.
Keywords: Epsilon-Based Measure; environmental efficiency; health expenditure; network SBM.