IDEAS home Printed from https://ideas.repec.org/a/eee/apmaco/v270y2015icp527-533.html
   My bibliography  Save this article

On variable reductions in data envelopment analysis with an illustrative application to a gas company

Author

Listed:
  • Toloo, Mehdi
  • Babaee, Seddigheh

Abstract

Data envelopment analysis (DEA) is a non-parametric data oriented method for evaluating relative efficiency of the number of decision making units (DMUs) based on pre-selected inputs and outputs. In some real DEA applications, the large number of inputs and outputs, in comparison with the number of DMUs, is a pitfall that could have major influence on the efficiency scores. Recently, an approach was introduced which aggregates collected inputs and outputs in order to reduce the number of inputs and outputs iteratively. The purpose of this paper is to show that there are three drawbacks in this approach: instability due to existence of an infinitesimal epsilon, iteratively which can be improved to just one iteration, and providing non-radial inputs and outputs and then capturing them. In order to illustrate the applicability of the improved approach, a real data set involving 14 large branches of National Iranian Gas Company (NIGC) is utilized.

Suggested Citation

  • Toloo, Mehdi & Babaee, Seddigheh, 2015. "On variable reductions in data envelopment analysis with an illustrative application to a gas company," Applied Mathematics and Computation, Elsevier, vol. 270(C), pages 527-533.
    • Handle: RePEc:eee:apmaco:v:270:y:2015:i:c:p:527-533
    DOI: 10.1016/j.amc.2015.06.122
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S0096300315009030
    Download Restriction: Full text for ScienceDirect subscribers only
    File URL: https://libkey.io/10.1016/j.amc.2015.06.122?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Mehdi Toloo & Mona Barat & Atefeh Masoumzadeh, 2015. "Selective measures in data envelopment analysis," Annals of Operations Research, Springer, vol. 226(1), pages 623-642, March.
    2. Mehdi Toloo & Atefeh Masoumzadeh & Mona Barat, 2015. "Finding an Initial Basic Feasible Solution for DEA Models with an Application on Bank Industry," Computational Economics, Springer;Society for Computational Economics, vol. 45(2), pages 323-336, February.
    3. Adler, Nicole & Yazhemsky, Ekaterina, 2010. "Improving discrimination in data envelopment analysis: PCA-DEA or variable reduction," European Journal of Operational Research, Elsevier, vol. 202(1), pages 273-284, April.
    4. Charnes, A. & Cooper, W. W. & Rhodes, E., 1978. "Measuring the efficiency of decision making units," European Journal of Operational Research, Elsevier, vol. 2(6), pages 429-444, November.
    5. Nataraja, Niranjan R. & Johnson, Andrew L., 2011. "Guidelines for using variable selection techniques in data envelopment analysis," European Journal of Operational Research, Elsevier, vol. 215(3), pages 662-669, December.
    6. N Adler & B Golany, 2002. "Including principal component weights to improve discrimination in data envelopment analysis," Journal of the Operational Research Society, Palgrave Macmillan;The OR Society, vol. 53(9), pages 985-991, September.
    7. R. D. Banker & A. Charnes & W. W. Cooper, 1984. "Some Models for Estimating Technical and Scale Inefficiencies in Data Envelopment Analysis," Management Science, INFORMS, vol. 30(9), pages 1078-1092, September.
    8. Mehdi Toloo & Mona Barat & Atefeh Masoumzadeh, 2015. "Erratum to: Selective measures in data envelopment analysis," Annals of Operations Research, Springer, vol. 235(1), pages 821-821, December.
    9. William W. Cooper & Lawrence M. Seiford & Kaoru Tone, 2007. "Data Envelopment Analysis," Springer Books, Springer, edition 0, number 978-0-387-45283-8, November.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Toloo, Mehdi & Hančlová, Jana, 2020. "Multi-valued measures in DEA in the presence of undesirable outputs," Omega, Elsevier, vol. 94(C).
    2. Capece, Guendalina & Costa, Roberta & Di Pillo, Francesca, 2021. "Benchmarking the efficiency of natural gas distribution utilities in Italy considering size, ownership, and maturity," Utilities Policy, Elsevier, vol. 72(C).
    3. Sueyoshi, Toshiyuki & Yuan, Yan & Goto, Mika, 2017. "A literature study for DEA applied to energy and environment," Energy Economics, Elsevier, vol. 62(C), pages 104-124.
    4. Villanueva-Cantillo, Jeyms & Munoz-Marquez, Manuel, 2021. "Methodology for calculating critical values of relevance measures in variable selection methods in data envelopment analysis," European Journal of Operational Research, Elsevier, vol. 290(2), pages 657-670.
    5. Toloo, Mehdi & Keshavarz, Esmaeil & Hatami-Marbini, Adel, 2021. "Selecting data envelopment analysis models: A data-driven application to EU countries," Omega, Elsevier, vol. 101(C).
    6. Pendharkar, Parag C., 2021. "Allocating fixed costs using multi-coalition epsilon equilibrium," International Journal of Production Economics, Elsevier, vol. 239(C).

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Anna Łozowicka & Bartłomiej Lach, 2022. "CI-DEA: A Way to Improve the Discriminatory Power of DEA—Using the Example of the Efficiency Assessment of the Digitalization in the Life of the Generation 50+," Sustainability, MDPI, vol. 14(6), pages 1-22, March.
    2. Toloo, Mehdi & Hančlová, Jana, 2020. "Multi-valued measures in DEA in the presence of undesirable outputs," Omega, Elsevier, vol. 94(C).
    3. Toloo, Mehdi & Tone, Kaoru & Izadikhah, Mohammad, 2023. "Selecting slacks-based data envelopment analysis models," European Journal of Operational Research, Elsevier, vol. 308(3), pages 1302-1318.
    4. Villanueva-Cantillo, Jeyms & Munoz-Marquez, Manuel, 2021. "Methodology for calculating critical values of relevance measures in variable selection methods in data envelopment analysis," European Journal of Operational Research, Elsevier, vol. 290(2), pages 657-670.
    5. Esteve, Miriam & Aparicio, Juan & Rodriguez-Sala, Jesus J. & Zhu, Joe, 2023. "Random Forests and the measurement of super-efficiency in the context of Free Disposal Hull," European Journal of Operational Research, Elsevier, vol. 304(2), pages 729-744.
    6. Dariush Khezrimotlagh & Wade D. Cook & Joe Zhu, 2021. "Number of performance measures versus number of decision making units in DEA," Annals of Operations Research, Springer, vol. 303(1), pages 529-562, August.
    7. Toloo, Mehdi & Keshavarz, Esmaeil & Hatami-Marbini, Adel, 2021. "Selecting data envelopment analysis models: A data-driven application to EU countries," Omega, Elsevier, vol. 101(C).
    8. Jamal Ouenniche & Skarleth Carrales, 2018. "Assessing efficiency profiles of UK commercial banks: a DEA analysis with regression-based feedback," Annals of Operations Research, Springer, vol. 266(1), pages 551-587, July.
    9. Peyrache, Antonio & Rose, Christiern & Sicilia, Gabriela, 2020. "Variable selection in Data Envelopment Analysis," European Journal of Operational Research, Elsevier, vol. 282(2), pages 644-659.
    10. Vincenzo Patrizii & Anna Pettini & Giuliano Resce, 2017. "The Cost of Well-Being," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 133(3), pages 985-1010, September.
    11. Eskelinen, Juha, 2017. "Comparison of variable selection techniques for data envelopment analysis in a retail bank," European Journal of Operational Research, Elsevier, vol. 259(2), pages 778-788.
    12. Raul Moragues & Juan Aparicio & Miriam Esteve, 2023. "Ranking the Importance of Variables in a Nonparametric Frontier Analysis Using Unsupervised Machine Learning Techniques," Mathematics, MDPI, vol. 11(11), pages 1-24, June.
    13. Chien-Ming Chen & Magali A. Delmas, 2012. "Measuring Eco-Inefficiency: A New Frontier Approach," Operations Research, INFORMS, vol. 60(5), pages 1064-1079, October.
    14. Lin, Tzu-Yu & Chiu, Sheng-Hsiung, 2013. "Using independent component analysis and network DEA to improve bank performance evaluation," Economic Modelling, Elsevier, vol. 32(C), pages 608-616.
    15. Congcong Yang & Alfred Taudes & Guozhi Dong, 2017. "Efficiency analysis of European Freight Villages: three peers for benchmarking," Central European Journal of Operations Research, Springer;Slovak Society for Operations Research;Hungarian Operational Research Society;Czech Society for Operations Research;Österr. Gesellschaft für Operations Research (ÖGOR);Slovenian Society Informatika - Section for Operational Research;Croatian Operational Research Society, vol. 25(1), pages 91-122, March.
    16. Kristína Kočišová & Jakub Sopko, 2020. "The Efficiency of Public Health and Medical Care Systems in EU Countries: Dynamic Network Data Envelopment Analysis," Acta Universitatis Agriculturae et Silviculturae Mendelianae Brunensis, Mendel University Press, vol. 68(2), pages 383-394.
    17. Mehdi Toloo & Mona Barat, 2015. "On considering dual-role factor in supplier selection problem," Mathematical Methods of Operations Research, Springer;Gesellschaft für Operations Research (GOR);Nederlands Genootschap voor Besliskunde (NGB), vol. 82(1), pages 107-122, August.
    18. Mehdi Toloo & Rahele Jalili, 2016. "LU Decomposition in DEA with an Application to Hospitals," Computational Economics, Springer;Society for Computational Economics, vol. 47(3), pages 473-488, March.
    19. Adler, Nicole & Liebert, Vanessa & Yazhemsky, Ekaterina, 2013. "Benchmarking airports from a managerial perspective," Omega, Elsevier, vol. 41(2), pages 442-458.
    20. Navas, Lina P. & Montes, Felipe & Abolghasem, Sepideh & Salas, Ricardo J. & Toloo, Mehdi & Zarama, Roberto, 2020. "Colombian higher education institutions evaluation," Socio-Economic Planning Sciences, Elsevier, vol. 71(C).

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:apmaco:v:270:y:2015:i:c:p:527-533. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Liu (email available below). General contact details of provider: https://www.journals.elsevier.com/applied-mathematics-and-computation .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.