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DEA and Intensity Variables

In: ADVANCES IN DATA ENVELOPMENT ANALYSIS

Author

Listed:
  • Rolf Färe
  • Shawna Grosskopf
  • Dimitris Margaritis

Abstract

The intensity variables in DEA originally were restricted to be nonnegative, and the focus was on their role in constructing the technology and identifying peer DMUs. It was known that the resulting technology satisfied constant returns to scale. Interestingly, in much earlier work using linear programming models of technology, Sydney Afriat (1972) showed that by restricting the intensity variables to sum to one (as well as nonnegative), variable returns to scale (VRS) could be modeled. Similarly, technology could be restricted to exhibit nonincreasing returns to scale by restricting the sum of the intensity variables to be less than or equal to one. Färe, Grosskopf and Logan (1983) used the nested nature of these restrictions to analyze returns to scale in DEA. The more familiar Banker, Charnes and Cooper (1984) (BCC) model followed in 1984…

Suggested Citation

  • Rolf Färe & Shawna Grosskopf & Dimitris Margaritis, 2015. "DEA and Intensity Variables," World Scientific Book Chapters, in: ADVANCES IN DATA ENVELOPMENT ANALYSIS, chapter 3, pages 37-52, World Scientific Publishing Co. Pte. Ltd..
  • Handle: RePEc:wsi:wschap:9789814644556_0003
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