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Two-Stage Network DEA with Bad Outputs

In: Data Envelopment Analysis

Author

Listed:
  • Hirofumi Fukuyama

    (Fukuoka University)

  • William L. Weber

    (Southeast Missouri State University)

Abstract

Conventional black-box DEA models allow producer performance to be measured for technologies where undesirable outputs are jointly produced by-products of desirable output production. These models allow for non-radial scaling of desirable outputs, undesirable outputs, and inputs and can account for slacks in the constraints that define the technology. We review some of these black-box performance measures and show how to measure performance in two-stage network models. In these kinds of network models inputs are used to produce intermediate outputs in a first stage and then, those intermediate outputs become inputs to a second stage where final desirable outputs and undesirable outputs are produced. The bias from using a black-box model when a network technology exists is examined as well as the bias from ignoring slacks in the constraints defining the network technology.

Suggested Citation

  • Hirofumi Fukuyama & William L. Weber, 2014. "Two-Stage Network DEA with Bad Outputs," International Series in Operations Research & Management Science, in: Wade D. Cook & Joe Zhu (ed.), Data Envelopment Analysis, edition 127, chapter 0, pages 451-474, Springer.
    • Handle: RePEc:spr:isochp:978-1-4899-8068-7_19
    DOI: 10.1007/978-1-4899-8068-7_19
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