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Multi-Output Efficiency with Good and Bad Outputs

Listed author(s):
  • Laurens Cherchye
  • Bram De Rock
  • Barnabé Walheer

Cherchye, De Rock, Dierynck, Roodhooft, and Sabbe (2013) introduced a DEA methodology that is specially tailored for multi-output efficiency measurement. The methodology accounts for jointly used inputs and incorporates information on how inputs are allocated to outputs. In this paper, we present extensions that render the methodology useful to deal with undesirable (or “bad”) outputs in addition to desirable (or “good”) outputs. Interestingly, these extensions deal in a natural way with several limitations of existing DEA approaches to treat undesirable outputs. We also demonstrate the practical usefulness of our methodological extensions through an application to US electric utilities.

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File URL: https://dipot.ulb.ac.be/dspace/bitstream/2013/149252/1/2013-35-CHERCHYE_DEROCK_WALHEER-multioutput.pdf
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Paper provided by ULB -- Universite Libre de Bruxelles in its series Working Papers ECARES with number ECARES 2013-35.

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Length: 25 p.
Date of creation: Sep 2013
Publication status: Published by:
Handle: RePEc:eca:wpaper:2013/149252
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Web page: http://difusion.ulb.ac.be

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