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Absolute and relative weight restrictions in DEA - a comparison

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  • Gerald Fugger

Abstract

In most data envelopment analysis (DEA) models, the decision maker (DM) only selects inputs and outputs and does not have to make any previous assumptions about the underlying production process. Without additional weight restrictions, the linear program may assign zero weights to inputs and outputs of certain decision-making units (DMUs). Specialised DMUs can be calculated as efficient because only subsets of the data are included in their efficiency calculation. In most cases, however, it is not desirable to ignore inputs or outputs previously selected by the DM, so technical efficiency can overestimate true efficiency. Additional weight restrictions can avoid specialised DMUs, further improve discrimination between DMUs, and allow the implementation of prior knowledge of the production process. This publication provides a comprehensive literature review of relevant studies on additional weight restrictions in the DEA and discusses their implementation and effects. The latter aspects are demonstrated first for five artificial DMUs and then for 1,000,000 simulated DMUs.

Suggested Citation

  • Gerald Fugger, 2023. "Absolute and relative weight restrictions in DEA - a comparison," International Journal of Operational Research, Inderscience Enterprises Ltd, vol. 47(2), pages 245-271.
    • Handle: RePEc:ids:ijores:v:47:y:2023:i:2:p:245-271
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