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A study of optimal weights restriction in Data Envelopment Analysis

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  • Chun-Chu Liu

Abstract

Data Envelopment Analysis (DEA) is a mathematical programming approach to assessing relative efficiencies within a group of Decision Making Units (DMUs). An important outcome of such an analysis is a set of virtual multipliers or weights accorded to each (input or output) factor taken into account. Due to the factor weight flexibility of the DEA model, a DMU may assign very low-factor weight scores to some of its unfavourable inputs or outputs and appear as efficient, thus producing nonsensical results in some cases. This study focuses on this shortcoming to integrate an optimal weights restriction model and absolute restriction method to restricting weight flexibility in DEA, so that the evaluation result can be more realistic, and finally takes the garbage clearance of each district in Kaohsiung city in Taiwan as an example for the illustration.

Suggested Citation

  • Chun-Chu Liu, 2009. "A study of optimal weights restriction in Data Envelopment Analysis," Applied Economics, Taylor & Francis Journals, vol. 41(14), pages 1785-1790.
    • Handle: RePEc:taf:applec:v:41:y:2009:i:14:p:1785-1790
    DOI: 10.1080/00036840601131706
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    Cited by:

    1. Milan Ranđelović & Jelena Stanković & Kristijan Kuk & Gordana Savić & Dragan Ranđelović, 2018. "An Approach to Determining the Importance of Model Criteria in Certifying a City as Business-Friendly," Interfaces, INFORMS, vol. 48(2), pages 156-165, April.
    2. Costa, Marcelo Azevedo & Lopes-Ahn, Ana Lúcia & Kilger, Alexander de Carvalho & Micas, Artur Fontenelle, 2023. "Limitations of weight restrictions in data envelopment analysis for benchmarking Brazilian electricity distribution system operators," Utilities Policy, Elsevier, vol. 82(C).

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