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Negative data in DEA: a simple proportional distance function approach

Author

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  • K Kerstens

    (IESEG School of Management)

  • I Van de Woestyne

    (Hogeschool Universiteit Brussel)

Abstract

The need to adapt Data Envelopment Analysis (DEA) and other frontier models in the context of negative data has been a rather neglected issue in the literature. A recent article in this journal proposed a variation on the directional distance function, a very general distance function that is dual to the profit function, to accommodate the occurrence of negative data. In this contribution, we define and recommend a generalised Farrell proportional distance function that can do the same job and that maintains a proportional interpretation under mild conditions.

Suggested Citation

  • K Kerstens & I Van de Woestyne, 2011. "Negative data in DEA: a simple proportional distance function approach," Journal of the Operational Research Society, Palgrave Macmillan;The OR Society, vol. 62(7), pages 1413-1419, July.
    • Handle: RePEc:pal:jorsoc:v:62:y:2011:i:7:d:10.1057_jors.2010.108
    DOI: 10.1057/jors.2010.108
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