Estimating and decomposing overall inefficiency by determining the least distance to the strongly efficient frontier in data envelopment analysis

Aparicio, Juan; Pastor, Jesús T.; Sainz-Pardo, José L.; Vidal, Fernando

doi:10.1007/s12351-017-0339-0

Cited by 10 publications

(3 citation statements)

References 38 publications

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“…■ By Proposition 1, it is obvious that if the input-output market prices   However, as with the previous proposals (8) and (32), profit inefficiency must be normalized (deflated) in order to obtain an appropriate measuresee Aparicio et al (2016). Accordingly, we propose the following solution, which was proved in Aparicio et al (2017a).…”

Section: Profit Cross-inefficiency Measure Based On the Hölder Distanmentioning

confidence: 93%

New Definitions of Economic Cross-Efficiency

Aparicio

Zofío

2019

SSRN Journal

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Overall efficiency measures were introduced in the literature for evaluating the economic performance of firms when reference prices are available. These references are usually observed market prices. Recently, Aparicio and Zofío (2019) have shown that the result of applying cross-efficiency methods (Sexton et al., 1986), yielding an aggregate multilateral index that compares the technical performance of firms using the shadow prices of competitors, can be precisely reinterpreted as a measure of economic efficiency. They termed the new approach 'economic cross-efficiency'. However, these authors restrict their analysis to the basic definitions corresponding to the Farrell (1957) and Nerlove (1965) approaches, i.e., based on the duality between the cost function and the input distance function and between the profit function and the directional distance function, respectively. Here we complete their proposal by introducing new economic cross-efficiency measures related to other popular approaches for measuring economic performance. Specifically those based on the duality between the profitability (maximum revenue to cost) and the generalized (hyperbolic) distance function, and between the profit function and either the weighted additive or the Hölder distance function. Additionally, we introduce panel data extensions related to the so-called cost Malmquist index and the profit Luenberger indicator. Finally, we illustrate the models resorting to Data Envelopment Analysis techniquesfrom which shadow prices are obtained, and considering a banking industry dataset previously used in the cross-efficiency literature.

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Section: Profit Cross-inefficiency Measure Based On the Hölder Distanmentioning

confidence: 93%

New Definitions of Economic Cross-Efficiency

Aparicio

Zofío

2019

SSRN Journal

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“…The literature on DEA approaches to compute closest efficient targets is abundant, dating back to Frei and Harker (1999). The reader is referred to Aparicio (2016) and Aparicio et al (2017aAparicio et al ( , 2017b…”

Section: Meffp Target Setting Modelmentioning

confidence: 99%

Potential-based efficiency assessment and target setting

Soltani

Lozano

2018

Computers & Industrial Engineering

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“…For recent and up-to-date developments on the least distance projections, the reader is referred to Aparicio (2016) and Aparicio et al (2017d).…”

Section: Introductionmentioning

confidence: 99%

A modified distance friction minimization approach in data envelopment analysis

et al. 2019

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A multi-step distance friction minimization (DFM) approach has been developed to assist a decision making unit to improve its efficiency. This approach contracts inputs and expands outputs simultaneously through the minimization of distance friction relative to the strongly efficient frontier based on a weighted Euclidean norm. In this paper, we point out that the DFM approach has a problem by means of two numerical examples and then show how to solve the problem. Using a real data set, we not only confirm the occurrence of this problem inherent in the original formulation, but also demonstrate how our modification works.

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Estimating and decomposing overall inefficiency by determining the least distance to the strongly efficient frontier in data envelopment analysis

Cited by 10 publications

References 38 publications

New Definitions of Economic Cross-Efficiency

New Definitions of Economic Cross-Efficiency

Potential-based efficiency assessment and target setting

A modified distance friction minimization approach in data envelopment analysis

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