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

Author

Listed:
  • Juan Aparicio

    (Miguel Hernandez University of Elche (UMH))

  • Jesus T. Pastor

    (Miguel Hernandez University of Elche (UMH))

  • Jose L. Sainz-Pardo

    (Miguel Hernandez University of Elche (UMH))

  • Fernando Vidal

    (Miguel Hernandez University of Elche (UMH))

Abstract

This paper proposes a new method to measure economic inefficiency of decision making units based on the calculation of the least distance to the Pareto-efficient frontier in data envelopment analysis. While all previously published approaches that have dealt with the problem of determining least distances to the efficient frontier are focus on exclusively technical inefficiency, the new methodology opens the door to applications of this approach when market prices, together with inputs and outputs, are available. Finally, the paper empirically illustrates the new method using recent data on the mandarins’ production in a Spanish eastern province.

Suggested Citation

  • Juan Aparicio & Jesus T. Pastor & Jose L. Sainz-Pardo & Fernando Vidal, 2020. "Estimating and decomposing overall inefficiency by determining the least distance to the strongly efficient frontier in data envelopment analysis," Operational Research, Springer, vol. 20(2), pages 747-770, June.
    • Handle: RePEc:spr:operea:v:20:y:2020:i:2:d:10.1007_s12351-017-0339-0
    DOI: 10.1007/s12351-017-0339-0
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    References listed on IDEAS

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    1. Juan Aparicio & José L. Zofío, 2020. "New Definitions of Economic Cross-efficiency," International Series in Operations Research & Management Science, in: Juan Aparicio & C. A. Knox Lovell & Jesus T. Pastor & Joe Zhu (ed.), Advances in Efficiency and Productivity II, pages 11-32, Springer.

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