IDEAS home Printed from https://ideas.repec.org/p/uct/uconnp/2010-07.html
   My bibliography  Save this paper

A One-Step Procedure for Returns to Scale Classification of Decision Making Units in Data Envelopment Analysis

Author

Listed:
  • Subhash C. Ray

    (University of Connecticut)

Abstract

The input-output bundle of an efficient decision making unit (DMU) is located at a specific point on the frontier of the production possibility set. Returns to Scale (RTS) at this point can be unequivocally characterized. For an inefficient DMU, however, the input- and output-oriented projections on to the frontier will be different and RTS classifications at these two points may differ. In the existing literature, one needs to solve two DEA problems, one input-oriented and another output-oriented to determine the nature of RTS at these two different efficient projections. This paper shows how one can determine the returns to scale properties of an inefficient bundle simultaneously at both projections from the optimal solution of a single CCR-DEA problem either output- or input-oriented. A data set used by Christensen and Greene in their well known study of US electric utilities is used for an illustration of the proposed method in a numerical example.

Suggested Citation

  • Subhash C. Ray, 2010. "A One-Step Procedure for Returns to Scale Classification of Decision Making Units in Data Envelopment Analysis," Working papers 2010-07, University of Connecticut, Department of Economics.
  • Handle: RePEc:uct:uconnp:2010-07
    as

    Download full text from publisher

    File URL: http://web2.uconn.edu/economics/working/2010-07.pdf
    File Function: Full text
    Download Restriction: no

    References listed on IDEAS

    as
    1. Kerstens, Kristiaan & Vanden Eeckaut, Philippe, 1999. "Estimating returns to scale using non-parametric deterministic technologies: A new method based on goodness-of-fit," European Journal of Operational Research, Elsevier, vol. 113(1), pages 206-214, February.
    2. Banker, Rajiv D., 1984. "Estimating most productive scale size using data envelopment analysis," European Journal of Operational Research, Elsevier, vol. 17(1), pages 35-44, July.
    3. Banker, Rajiv D. & Cooper, William W. & Seiford, Lawrence M. & Thrall, Robert M. & Zhu, Joe, 2004. "Returns to scale in different DEA models," European Journal of Operational Research, Elsevier, vol. 154(2), pages 345-362, April.
    4. R. D. Banker & A. Charnes & W. W. Cooper, 1984. "Some Models for Estimating Technical and Scale Inefficiencies in Data Envelopment Analysis," Management Science, INFORMS, vol. 30(9), pages 1078-1092, September.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. repec:bbz:fcpbbr:v:11:y:2014:i:5:p:72-98 is not listed on IDEAS
    2. Subhash C. Ray, 2014. "Data Envelopment Analysis: An Overview," Working papers 2014-33, University of Connecticut, Department of Economics.
    3. Wanke, Peter & Barros, C.P. & Nwaogbe, Obioma R., 2016. "Assessing productive efficiency in Nigerian airports using Fuzzy-DEA," Transport Policy, Elsevier, vol. 49(C), pages 9-19.

    More about this item

    Keywords

    Most Productive Scale Size; Convex Technologies; Nonparametric Efficiency Analysis;

    JEL classification:

    • D2 - Microeconomics - - Production and Organizations
    • C6 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:uct:uconnp:2010-07. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Mark McConnel). General contact details of provider: http://edirc.repec.org/data/deuctus.html .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.