Value Efficiency Analysis for Incorporating Preference Information in Data Envelopment Analysis
AbstractWe develop a procedure and the requisite theory for incorporating preference information in a novel way in the efficiency analysis of Decision Making Units. The efficiency of Decision Making Units is defined in the spirit of Data Envelopment Analysis (DEA), complemented with Decision Maker's preference information concerning the desirable structure of inputs and outputs. Our procedure begins by aiding the Decision Maker in searching for the most preferred combination of inputs and outputs of Decision Making Units (for short, Most Preferred Solution) which are efficient in DEA. Then, assuming that the Decision Maker's Most Preferred Solution maximizes his/her underlying (unknown) value function at the moment when the search is terminated, we approximate the indifference contour of the value function at this point with its possible tangent hyperplanes. Value Efficiency scores are then calculated for each Decision Making Unit comparing the inefficient units to units having the same value as the Most Preferred Solution. The resulting Value Efficiency scores are optimistic approximations of the true scores. The procedure and the resulting efficiency scores are immediately applicable to solving practical problems.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
Bibliographic InfoPaper provided by International Institute for Applied Systems Analysis in its series Working Papers with number ir98054.
Date of creation: Aug 1998
Date of revision:
Contact details of provider:
Postal: A-2361 Laxenburg
Web page: http://www.iiasa.ac.at/Publications/Catalog/PUB_ONLINE.html
More information through EDIRC
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Bell,David E. & Raiffa,Howard & Tversky,Amos (ed.), 1989. "Decision Making," Cambridge Books, Cambridge University Press, number 9780521368513, December.
- Charnes, A. & Cooper, W. W. & Golany, B. & Seiford, L. & Stutz, J., 1985. "Foundations of data envelopment analysis for Pareto-Koopmans efficient empirical production functions," Journal of Econometrics, Elsevier, vol. 30(1-2), pages 91-107.
- R. D. Banker & A. Charnes & W. W. Cooper, 1984. "Some Models for Estimating Technical and Scale Inefficiencies in Data Envelopment Analysis," Management Science, INFORMS, vol. 30(9), pages 1078-1092, September.
- Thanassoulis, E. & Dyson, R. G., 1992. "Estimating preferred target input-output levels using data envelopment analysis," European Journal of Operational Research, Elsevier, vol. 56(1), pages 80-97, January.
- Charnes, A. & Cooper, W. W. & Rhodes, E., 1978. "Measuring the efficiency of decision making units," European Journal of Operational Research, Elsevier, vol. 2(6), pages 429-444, November.
- Korhonen, Pekka & Tainio, Risto & Wallenius, Jyrki, 2001.
"Value efficiency analysis of academic research,"
European Journal of Operational Research,
Elsevier, vol. 130(1), pages 121-132, April.
- Inha Oh & Jeong-Dong Lee & Seogwon Hwang & Almas Heshmati, 2010.
"Analysis of product efficiency in the Korean automobile market from a consumer’s perspective,"
Springer, vol. 38(1), pages 119-137, February.
- Oh, Inha & Lee, Jeong-Dong & Hwang, Seogwon & Heshmati, Almas, 2006. "Analysis of Product Efficiency in the Korean Automobile Market from a Consumer’s Perspective," Ratio Working Papers 95, The Ratio Institute.
- M. Halme & P. Korhonen, 1998.
"Restricting Weights in Value Efficiency Analysis,"
ir98104, International Institute for Applied Systems Analysis.
- Martin Eling, 2006. "Performance measurement of hedge funds using data envelopment analysis," Financial Markets and Portfolio Management, Springer, vol. 20(4), pages 442-471, December.
- M. Halme & T. Joro & M. Koivu, 1998. "Dealing with Interval Scale Data in Data Envelopment Analysis," Working Papers ir98112, International Institute for Applied Systems Analysis.
- Bogetoft, Peter & Hougaard, Jens Leth, 2001.
Unit of Economics Working papers
24191, Royal Veterinary and Agricultural University, Food and Resource Economic Institute.
- Özgür Özpeynirci & Murat Köksalan, 2007. "Performance evaluation using data envelopment analysis in the presence of time lags," Journal of Productivity Analysis, Springer, vol. 27(3), pages 221-229, June.
- T. Joro, 1998. "Models for Identifying Target Units in Data Envelopment Analysis: Comparison and Extension," Working Papers ir98055, International Institute for Applied Systems Analysis.
- George E. Halkos & Nickolaos G. Tzeremes & Stavros A. Kourtzidis, 2010. "An application of statistical interference in DEA models: An analysis of public owned university departments' efficiency," EERI Research Paper Series EERI_RP_2010_17, Economics and Econometrics Research Institute (EERI), Brussels.
- T. Joro & E-J. Viitala, 1999. "The Efficiency of Public Forestry Organizations: A Comparison of Different Weight Restriction Approaches," Working Papers ir99059, International Institute for Applied Systems Analysis.
- Marshall, Elizabeth P. & Shortle, James S., 2004.
"Using Dea And Vea To Evaluate Quality Of Life In The Mid-Atlantic States,"
2004 Annual meeting, August 1-4, Denver, CO
20198, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
- Marshall, Elizabeth P. & Shortle, James S., 2005. "Using DEA and VEA to Evaluate Quality of Life in the Mid-Atlantic States," Agricultural and Resource Economics Review, Northeastern Agricultural and Resource Economics Association, vol. 34(2), October.
- Peter Nijkamp & Soushi Suzuki, 2009.
"A Generalized Goals-achievement Model in Data Envelopment Analysis: an Application to Efficiency Improvement in Local Government Finance in Japan,"
Spatial Economic Analysis,
Taylor & Francis Journals, vol. 4(3), pages 249-274.
- Suzuki, S. & Nijkamp, P., 2008. "A generalized goals-achievement model in data envelopment analysis : an application to efficiency improvement in local government finance in Japan," Serie Research Memoranda 0014, VU University Amsterdam, Faculty of Economics, Business Administration and Econometrics.
- Soushi Suzuki & Peter Nijkamp, 2008. "A Generalized Goals-achievement Model in Data Envelopment Analysis," Tinbergen Institute Discussion Papers 08-110/3, Tinbergen Institute.
- P. Korhonen & A. Siljamaeki & M. Soismaa, 1998. "Practical Aspects of Value Efficiency Analysis," Working Papers ir98042, International Institute for Applied Systems Analysis.
- Bogetoft, Peter & Nielsen, Kurt, 2002. "Internet Based Benchmarking," Unit of Economics Working papers 24215, Royal Veterinary and Agricultural University, Food and Resource Economic Institute.
- Jiménez, Fernando & Zabala Iturriagagoitia, Jon Mikel & Zofío, José Luis, 2007. "Efficiency in Public Research Centers: Evaluating the Spanish Food Technology Program," Working Papers in Economic Theory 2007/04, Universidad Autónoma de Madrid (Spain), Department of Economic Analysis (Economic Theory and Economic History).
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Thomas Krichel).
If references are entirely missing, you can add them using this form.