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Sensitivity Analysis of BCC Efficiency in DEA with Application to European Health Services

In: Operations Research Proceedings 2013

Author

Listed:
  • Andreas Kleine

    (Fern Universität Hagen)

  • Andreas Dellnitz

    (Fern Universität Hagen)

  • Wilhelm Rödder

    (Fern Universität Hagen)

Abstract

The CCR model by Charnes et al. [4] on the one hand and BCC model by Banker et al. [3] on the other hand are the most common used approaches of data envelopment analysis (DEA). If we measure efficiency of decision making units (DMUs) by the BCC model, technology is characterized by variable returns to scale. If the inputs and outputs of a DMU are scaled by two parameters such that the BCC (in)efficiency score is unchanged we call this adaptation a bicentric scaling (BS). We introduce a linear program to calculate the BS stability region of all DMUs, efficient or inefficient. Moreover we determine the scale efficiency within the stability region. The new approach is illustrated by a numerical example of European health services. We demonstrate the BS stability region for various states and illustrate consequences on scale efficiency. It is shown that some states can improve scale efficiency without losing BCC efficiency.

Suggested Citation

  • Andreas Kleine & Andreas Dellnitz & Wilhelm Rödder, 2014. "Sensitivity Analysis of BCC Efficiency in DEA with Application to European Health Services," Operations Research Proceedings, in: Dennis Huisman & Ilse Louwerse & Albert P.M. Wagelmans (ed.), Operations Research Proceedings 2013, edition 127, pages 243-248, Springer.
    • Handle: RePEc:spr:oprchp:978-3-319-07001-8_33
    DOI: 10.1007/978-3-319-07001-8_33
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    Cited by:

    1. Andreas Dellnitz & Andreas Kleine & Wilhelm Rödder, 2018. "CCR or BCC: what if we are in the wrong model?," Journal of Business Economics, Springer, vol. 88(7), pages 831-850, September.

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