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Sequential data envelopment analysis: decentralization and solutions for panel data

Author

Listed:
  • Rolf Färe

    (Oregon State University
    University of Maryland)

  • Zhichao Wang

    (The University of Queensland)

  • Valentin Zelenyuk

    (The University of Queensland)

Abstract

To address the company-branch structure in data envelopment analysis (DEA), Färe and Zelenyuk (2021, Annals of Operations Research) proposed a sequential DEA (sDEA) framework, which accounts for both company-level management uniformity and the district specific influence on the production process from a branch-level perspective. To account for the varying levels of branch independence, in this work we extend the flexibility of sDEA by introducing two decentralized estimators, accommodating the variability of branch-level efficiency and frontier. By broadening the scope from spatial to temporal sequences, we also show how the sDEA estimators can provide solutions for panel data problems in the realm of DEA. Through an empirical application on the public hospitals in Queensland, Australia, we illustrate that the canonical and the decentralized sDEA estimators can be adapted to effectively address the efficiency estimation in panel data. In contrast, the conventional DEA estimators, overlooking the time effects, may yield underestimated hospital-level efficiency.

Suggested Citation

  • Rolf Färe & Zhichao Wang & Valentin Zelenyuk, 2025. "Sequential data envelopment analysis: decentralization and solutions for panel data," Journal of Productivity Analysis, Springer, vol. 63(3), pages 261-268, June.
    • Handle: RePEc:kap:jproda:v:63:y:2025:i:3:d:10.1007_s11123-024-00746-y
    DOI: 10.1007/s11123-024-00746-y
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    References listed on IDEAS

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    1. Leopold Simar & Valentin Zelenyuk, 2006. "On Testing Equality of Distributions of Technical Efficiency Scores," Econometric Reviews, Taylor & Francis Journals, vol. 25(4), pages 497-522.
    2. Pham, Manh D. & Zelenyuk, Valentin, 2019. "Weak disposability in nonparametric production analysis: A new taxonomy of reference technology sets," European Journal of Operational Research, Elsevier, vol. 274(1), pages 186-198.
    3. Léopold Simar & Valentin Zelenyuk, 2018. "Central Limit Theorems for Aggregate Efficiency," Operations Research, INFORMS, vol. 66(1), pages 137-149, January.
    4. Gary Ferrier & Julie Trivitt, 2013. "Incorporating quality into the measurement of hospital efficiency: a double DEA approach," Journal of Productivity Analysis, Springer, vol. 40(3), pages 337-355, December.
    5. Chiang Kao, 2014. "Efficiency Decomposition in Network Data Envelopment Analysis," International Series in Operations Research & Management Science, in: Wade D. Cook & Joe Zhu (ed.), Data Envelopment Analysis, edition 127, chapter 0, pages 55-77, Springer.
    6. Zhichao Wang & Bao Hoang Nguyen & Valentin Zelenyuk, 2024. "Performance analysis of hospitals in Australia and its peers: a systematic and critical review," Journal of Productivity Analysis, Springer, vol. 62(2), pages 139-173, October.
    7. Rolf Färe & Valentin Zelenyuk, 2021. "Sequential data envelopment analysis," Annals of Operations Research, Springer, vol. 300(1), pages 307-312, May.
    8. Kneip, Alois & Simar, Léopold & Wilson, Paul W., 2015. "When Bias Kills The Variance: Central Limit Theorems For Dea And Fdh Efficiency Scores," Econometric Theory, Cambridge University Press, vol. 31(2), pages 394-422, April.
    9. Fare, Rolf & Zelenyuk, Valentin, 2003. "On aggregate Farrell efficiencies," European Journal of Operational Research, Elsevier, vol. 146(3), pages 615-620, May.
    10. Fare, Rolf & Knox Lovell, C. A., 1978. "Measuring the technical efficiency of production," Journal of Economic Theory, Elsevier, vol. 19(1), pages 150-162, October.
    11. Bao Hoang Nguyen & Shawna Grosskopf & Jongsay Yong & Valentin Zelenyuk, 2024. "Activity‐based funding reform and the performance of public hospitals: The case of Queensland, Australia," Economic Inquiry, Western Economic Association International, vol. 62(4), pages 1679-1701, October.
    12. Zelenyuk, Valentin & Zhao, Shirong, 2024. "Russell and slack-based measures of efficiency: A unifying framework," European Journal of Operational Research, Elsevier, vol. 318(3), pages 867-876.
    13. Kao, Chiang, 2014. "Network data envelopment analysis: A review," European Journal of Operational Research, Elsevier, vol. 239(1), pages 1-16.
    14. Chowdhury, Hedayet & Zelenyuk, Valentin, 2016. "Performance of hospital services in Ontario: DEA with truncated regression approach," Omega, Elsevier, vol. 63(C), pages 111-122.
    15. R Färe & S Grosskopf & D Margaritis, 2011. "The diet problem and DEA," Journal of the Operational Research Society, Palgrave Macmillan;The OR Society, vol. 62(7), pages 1420-1422, July.
    16. Bao Hoang Nguyen & Valentin Zelenyuk, 2021. "Aggregate efficiency of industry and its groups: the case of Queensland public hospitals," Empirical Economics, Springer, vol. 60(6), pages 2795-2836, June.
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    1. Daniel J. Henderson, 2025. "In Memoriam: R. Robert Russell, 1938–2023," Journal of Productivity Analysis, Springer, vol. 63(3), pages 241-243, June.

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