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A Generalized Goals-achievement Model in Data Envelopment Analysis

Author

Listed:
  • Soushi Suzuki

    (Hokkai-Gakuen University, Sapporo, Japan)

  • Peter Nijkamp

    (VU University Amsterdam)

Abstract

Data Envelopment Analysis (DEA) has become an established tool in comparative analyses of efficiency strategies in both the public and the private sector. The aim of this paper is to present and apply a newly developed, adjusted DEA model – emerging from a blend of a Distance Friction Minimization (DFM) and a Goals Achievement (GA) approach on the basis of the Charnes-Cooper-Rhodes (CCR) method – in order to generate a more satisfactory efficiency-improving projection model in conventional DEA. Our DFM model is based on a generalized Euclidean distance minimization and serves to assist a Decision Making Unit (DMU) in improving its performance by the most appropriate movement towards the efficiency frontier surface. Our DFM approach aims to generate a new contribution to efficiency enhancement strategies by deploying a weighted projection function. In addition, it may address both input reduction and output increase as a strategy of a DMU. The GA model can compute the input reduction value or the output increase value in order to achieve a pre-specified goal value for the efficiency improvement in an optimal way. The above-mentioned DFM-GA model is illustrated empirically by using a data set of efficiency indicators for cities in Hokkaido prefecture in Japan, where the aim is to increase the efficiency of local government finance mechanisms in these cities, based on various input and output performance characteristics.

Suggested Citation

  • Soushi Suzuki & Peter Nijkamp, 2008. "A Generalized Goals-achievement Model in Data Envelopment Analysis," Tinbergen Institute Discussion Papers 08-110/3, Tinbergen Institute.
    • Handle: RePEc:tin:wpaper:20080110
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    References listed on IDEAS

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    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    Distance Friction Minimization; Goals Achievement; Data Envelopment Analysis (DEA); Efficiency-improving Projection; Local Government Finance;
    All these keywords.

    JEL classification:

    • R51 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Regional Government Analysis - - - Finance in Urban and Rural Economies
    • H71 - Public Economics - - State and Local Government; Intergovernmental Relations - - - State and Local Taxation, Subsidies, and Revenue

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