The Theoretical Relationship between the CCR Model and the Two-Stage DEA Model with an Application in the Efficiency Analysis of the Financial Industry

Abstract

Since Charnes, Cooper, and Rhodes introduced data envelopment analysis (DEA) in 1978, later called the DEA-CCR model, many studies applied this technique to different fields. Based on the original CCR model, many modified DEA models were developed by researchers. Since 1999, Seiford and Zhu presented a two-stage DEA model. Later, these models were widely used in many studies. However, the relationship between the efficiency scores that are obtained from the original CCR model and the two-stage DEA model remains unknown. To fill this gap, this study proposed a theoretical relationship between the efficiency scores that are calculated from the two-stage DEA model and those that are obtained from the original CCR model. How the sets of nonsymmetrical weights affected the efficiency scores were also investigated. Theorems regarding the relationship were developed, and then the model was utilized to evaluate the two-stage efficiency scores of the insurance companies (non-life) and bank branches. The results show that using a two-stage DEA model can get more information about operational efficiency than the traditional CCR model does. The findings from this study about the two-stage DEA technique can provide significant reasons for using this model to evaluate performance efficiency.

Developing a sustainability strategy for Taiwan’s tourism industry after the COVID-19 pandemic

“…Because the income levels of different countries and regions are different, it is not enough simply comparing total expenditure amounts without comparing detailed information on tourists from various countries. As mentioned above, a two-stage data envelopment analysis (DEA) can provide more information about the data [ 60 ]; therefore, this study uses the technique as a tool to analyze the expenditure of tourists from different countries or with different purposes to calculate the overall benefits to Taiwan’s tourism industry.…”

“…Many researchers also applied the two-stage DEA model to evaluate relative efficiency in different fields [56][57][58][59]. Tsai et al [60] pointed out that the two-stage DEA analysis can present more detailed information. Therefore, this study performs a twostage DEA analysis to obtain suggestions for Taiwan's tourism industry in terms of which countries or aspects it should focus on to increase revenue.…”

Comprehensive intuitionistic fuzzy network data envelopment analysis incorporating undesirable outputs and shared resources

“…The two-stage network DEA is used in various real-life applications, such as banks, insurance companies, educational institutes, water and land, and many others studied by researchers in the literature [35] , [47] , [48] . Therefore, our proposed methodology applies to several real-life problems, considering shared inputs and intermediate measures, undesirable outputs produced by each stage, accessible inputs consumed by the second stage, and free outputs produced by the first stage.…”

Determining the Efficiency of the Sponge City Construction Pilots in China Based on the DEA-Malmquist Model

“…The DEA model possesses strong reliability and a scientific nature [ 29 ]. DEA is widely used in the economic management field, mainly for environmental efficiency analysis [ 30 , 31 ], green development efficiency assessment [ 32 ], eco-efficiency evaluation [ 33 , 34 , 35 ], energy efficiency [ 36 ], financial industry and innovation efficiency performance assessment [ 37 , 38 ], water use efficiency and flood vulnerability assessment [ 25 , 39 , 40 ], urban efficiency evaluation, etc. It has significant advantages in terms of simplifying calculations and processing multiple input–output indicators.…”