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A strong efficiency measure for CCR/BCC models

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  • Cova-Alonso, David José
  • Díaz-Hernández, Juan José
  • Martínez-Budría, Eduardo

Abstract

The Farrell technical efficiency measure computes the maximum proportional reduction that can be operated on inputs without affecting the level of output. In a multi-input and multi-output context, the first mathematical programming based reformulation of this problem is known as CCR/BCC efficiency measures. There are two drawbacks to this measure. First, it does not give value to any inefficiency resulting from the possibility of reducing some inputs and/or increasing some outputs in addition to the maximum proportional reduction in inputs. Second, as a result of the above, it does not unequivocally identify Pareto-Koopmans efficient activities.

Suggested Citation

  • Cova-Alonso, David José & Díaz-Hernández, Juan José & Martínez-Budría, Eduardo, 2021. "A strong efficiency measure for CCR/BCC models," European Journal of Operational Research, Elsevier, vol. 291(1), pages 284-295.
    • Handle: RePEc:eee:ejores:v:291:y:2021:i:1:p:284-295
    DOI: 10.1016/j.ejor.2020.09.006
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