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A slack-based measure of efficiency in context-dependent data envelopment analysis

Author

Listed:
  • Morita, Hiroshi
  • Hirokawa, Koichiro
  • Zhu, Joe

Abstract

Data envelopment analysis (DEA) has been proven as an excellent data-oriented performance evaluation method when multiple inputs and outputs are present in a set of peer decision-making units (DMUs). In the DEA literature, a context-dependent DEA is developed to provide finer evaluation results by examining the efficiency of DMUs in specific performance levels based upon radial DEA efficiency scores. In DEA, non-zero input and output slacks are very likely to present after the radial efficiency score improvement. Often, these non-zero slack values represent a substantial amount of inefficiency. Therefore, in order to fully measure the inefficiency in DMU's performance, it is very important to also consider the inefficiency represented by the non-zero slacks in the context-dependent DEA. This study proposes a slack-based context-dependent DEA which allows a full evaluation of inefficiency in a DMUs performance. By using slack-based efficiency measure, we obtain different frontier levels and more appropriate performance benchmarks for inefficient DMUs.

Suggested Citation

  • Morita, Hiroshi & Hirokawa, Koichiro & Zhu, Joe, 2005. "A slack-based measure of efficiency in context-dependent data envelopment analysis," Omega, Elsevier, vol. 33(4), pages 357-362, August.
  • Handle: RePEc:eee:jomega:v:33:y:2005:i:4:p:357-362
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    References listed on IDEAS

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    1. Seiford, Lawrence M. & Zhu, Joe, 2003. "Context-dependent data envelopment analysis--Measuring attractiveness and progress," Omega, Elsevier, vol. 31(5), pages 397-408, October.
    2. Per Andersen & Niels Christian Petersen, 1993. "A Procedure for Ranking Efficient Units in Data Envelopment Analysis," Management Science, INFORMS, vol. 39(10), pages 1261-1264, October.
    3. Zhu, Joe, 2001. "Super-efficiency and DEA sensitivity analysis," European Journal of Operational Research, Elsevier, vol. 129(2), pages 443-455, March.
    4. 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.
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    Citations

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    Cited by:

    1. Ulucan, AydIn & BarIs AtIcI, KazIm, 2010. "Efficiency evaluations with context-dependent and measure-specific data envelopment approaches: An application in a World Bank supported project," Omega, Elsevier, vol. 38(1-2), pages 68-83, February.
    2. Houshyar, Ehsan & Azadi, Hossein & Almassi, Morteza & Sheikh Davoodi, Mohammad Javad & Witlox, Frank, 2012. "Sustainable and efficient energy consumption of corn production in Southwest Iran: Combination of multi-fuzzy and DEA modeling," Energy, Elsevier, vol. 44(1), pages 672-681.
    3. Avkiran, Necmi K., 2009. "Opening the black box of efficiency analysis: An illustration with UAE banks," Omega, Elsevier, vol. 37(4), pages 930-941, August.
    4. Drake, Leigh & Hall, Maximilian J.B. & Simper, Richard, 2009. "Bank modelling methodologies: A comparative non-parametric analysis of efficiency in the Japanese banking sector," Journal of International Financial Markets, Institutions and Money, Elsevier, vol. 19(1), pages 1-15, February.
    5. Tsutsui, Miki & Goto, Mika, 2009. "A multi-division efficiency evaluation of U.S. electric power companies using a weighted slacks-based measure," Socio-Economic Planning Sciences, Elsevier, vol. 43(3), pages 201-208, September.
    6. Wei-Kang Wang & Wen-Min Lu & Yu-Han Wang, 2013. "The relationship between bank performance and intellectual capital in East Asia," Quality & Quantity: International Journal of Methodology, Springer, vol. 47(2), pages 1041-1062, February.
    7. Chang, Dong-Shang & Yang, Fu-Chiang, 2011. "Assessing the power generation, pollution control, and overall efficiencies of municipal solid waste incinerators in Taiwan," Energy Policy, Elsevier, vol. 39(2), pages 651-663, February.
    8. repec:gam:jsusta:v:9:y:2017:i:8:p:1483-:d:109144 is not listed on IDEAS
    9. Avkiran, Necmi K., 2007. "Stability and integrity tests in data envelopment analysis," Socio-Economic Planning Sciences, Elsevier, vol. 41(3), pages 224-234, September.
    10. Wen-Min Lu & Shih-Fang Lo, 2012. "Constructing stratifications for regions in China with sustainable development concerns," Quality & Quantity: International Journal of Methodology, Springer, vol. 46(6), pages 1807-1823, October.
    11. Fang, Hsin-Hsiung & Lee, Hsuan-Shih & Hwang, Shiuh-Nan & Chung, Cheng-Chi, 2013. "A slacks-based measure of super-efficiency in data envelopment analysis: An alternative approach," Omega, Elsevier, vol. 41(4), pages 731-734.
    12. Guo, I-Lung & Lee, Hsuan-Shih & Lee, Dan, 2017. "An integrated model for slack-based measure of super-efficiency in additive DEA," Omega, Elsevier, vol. 67(C), pages 160-167.

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