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Procedures for Ranking, Technical and Cost Ecient Units: With a Focus on Nonconvexity

Author

Listed:
  • Kristiaan KERSTENS

    (IESEG School of Management and LEM-UMR 9221)

  • Jafar SADEGHI

    (IESEG School of Management and Ivey Business School)

  • Medhi TOLOO

    (VSB-Technical University of Ostrava)

  • Ignace VAN DE WOESTYNE

    (KU Leuven)

Abstract

This contribution extends the literature on super-eciency by focusing on ranking cost-efficient observations. To the best of our knowledge, the focus has always been on technical super-efficiency and this focus on ranking cost-efficient observations may well open up a new topic. Furthermore, since the convexity axiom has both an impact on technical and cost eciency, we pay a particular attention on the e ect of nonconvexity on both super-efficiency notions. Apart from a numerical example, we use a secondary data set guaranteeing replication to illustrate these eciency and super-efficiency con- cepts. Two empirical conclusions emerge. First, the cost super-efficiency notion ranks di erently from the technical super-efficiency concept. Second, both cost and technical super-efficiency notions rank di erently under convex and nonconvex technologies.

Suggested Citation

  • Kristiaan KERSTENS & Jafar SADEGHI & Medhi TOLOO & Ignace VAN DE WOESTYNE, 2020. "Procedures for Ranking, Technical and Cost Ecient Units: With a Focus on Nonconvexity," Working Papers 2020-EQM-02, IESEG School of Management.
    • Handle: RePEc:ies:wpaper:e202002
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    More about this item

    Keywords

    : Data Envelopment Analysis; Free Disposal Hull; Technical Efficiency; Cost Efficiency; Super-efficiency;
    All these keywords.

    JEL classification:

    • D24 - Microeconomics - - Production and Organizations - - - Production; Cost; Capital; Capital, Total Factor, and Multifactor Productivity; Capacity

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