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An epsilon-based measure of efficiency in DEA revisited -A third pole of technical efficiency

Author

Listed:
  • Kaoru Tone

    (National Graduate Institute for Policy Studies)

  • Miki Tsutsui

    (Central Research Institute of Electric Power Industry)

Abstract

In DEA, we have two measures of technical efficiency with different characteristics: radial and non-radial. In this paper we compile them into a composite model called “epsilon-based measure (EBM).” For this purpose we introduce two parameters which connect radial and non-radial models. These two parameters are obtained from the newly defined affinity index between inputs or outputs along with principal component analysis on the affinity matrix. Thus, EBM takes into account diversity of input/output data and their relative importance for measuring technical efficiency.

Suggested Citation

  • Kaoru Tone & Miki Tsutsui, 2010. "An epsilon-based measure of efficiency in DEA revisited -A third pole of technical efficiency," GRIPS Discussion Papers 09-22, National Graduate Institute for Policy Studies.
    • Handle: RePEc:ngi:dpaper:09-22
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    Keywords

    Data envelopment analysis; Radial; Non-radial; CCR; SBM; EBM; Principal component analysis;
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