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An epsilon-based measure of efficiency in DEA revisited -A third pole of technical efficiency

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  • Kaoru Tone

    (National Graduate Institute for Policy Studies)

  • Miki Tsutsui

    (Central Research Institute of Electric Power Industry)

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    Abstract

    In DEA, we have two measures of technical efficiency with different characteristics: radial and non-radial. In this paper we compile them into a composite model called “epsilon-based measure (EBM).” For this purpose we introduce two parameters which connect radial and non-radial models. These two parameters are obtained from the newly defined affinity index between inputs or outputs along with principal component analysis on the affinity matrix. Thus, EBM takes into account diversity of input/output data and their relative importance for measuring technical efficiency.

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    Bibliographic Info

    Paper provided by National Graduate Institute for Policy Studies in its series GRIPS Discussion Papers with number 09-21.

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    Length: 26 pages
    Date of creation: Feb 2010
    Date of revision:
    Handle: RePEc:ngi:dpaper:09-21

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    Related research

    Keywords: Data envelopment analysis; Radial; Non-radial; CCR; SBM; EBM; Principal component analysis;

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    Cited by:
    1. Casasnovas, Valero L. & Aldanondo, Ana M., 2014. "Input aggregation bias in technical efficiency with multiple criteria analysis," MPRA Paper 56778, University Library of Munich, Germany.
    2. Cheng, Gang & Qian, Zhenhua, 2011. "An epsilon-based measure of efficiency in DEA - An alternative method for the affinity index," MPRA Paper 41680, University Library of Munich, Germany, revised 06 Nov 2011.

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