Sata Envelopment Analysis (DEA) of efficiency is highly sensitive to the level of aggregation. Generally as the number of inputs and outputs increase, differences in measured relative efficiency across firms decrease. This paper advocates using the EKS index number formula to aggreagte inputs and outputs into a single input and output index prior to using DEA.
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Paper provided by New South Wales - School of Economics in its series Papers with number
96/1.
Length: 14 pages Date of creation: 1996 Date of revision: Handle: RePEc:fth:nesowa:96/1
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Find related papers by JEL classification: C43 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods: Special Topics - - - Index Numbers and Aggregation C61 - Mathematical and Quantitative Methods - - Mathematical Methods and Programming - - - Optimization Techniques; Programming Models; Dynamic Analysis D24 - Microeconomics - - Production and Organizations - - - Production; Capital and Total Factor Productivity; Capacity