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The Efficiency of Public Forestry Organizations: A Comparison of Different Weight Restriction Approaches

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  • T. Joro
  • E-J. Viitala

Abstract

Data Envelopment Analysis (DEA) has become an increasingly popular approach to analyze the efficiency of public sector organizations. However, the underlying assumption of the method is that it is equally acceptable to specialize in producing any output or consuming any input. In many cases this kind of free specialization is not acceptable or desirable. In this paper, we use three extensions developed to the DEA method to incorporate additional judgment into the DEA models and study the sensitivity of the efficiency scores. the results indicate that even moderate restrictions on output weights in the optimization problem may lead to substantial changes in efficiency. It also seems that by analyzing only the technical efficiency, e.g., using only standard DEA without placing some kind of constraints on input and output weights, may lead to highly unreliable conclusions.

Suggested Citation

  • T. Joro & E-J. Viitala, 1999. "The Efficiency of Public Forestry Organizations: A Comparison of Different Weight Restriction Approaches," Working Papers ir99059, International Institute for Applied Systems Analysis.
  • Handle: RePEc:wop:iasawp:ir99059
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    References listed on IDEAS

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    1. Charnes, A. & Cooper, W. W. & Huang, Z. M. & Sun, D. B., 1990. "Polyhedral Cone-Ratio DEA Models with an illustrative application to large commercial banks," Journal of Econometrics, Elsevier, vol. 46(1-2), pages 73-91.
    2. Charnes, A. & Cooper, W. W. & Rhodes, E., 1978. "Measuring the efficiency of decision making units," European Journal of Operational Research, Elsevier, vol. 2(6), pages 429-444, November.
    3. R. Allen & A. Athanassopoulos & R.G. Dyson & E. Thanassoulis, 1997. "Weights restrictions and value judgements in Data Envelopment Analysis: Evolution, development and future directions," Annals of Operations Research, Springer, vol. 73(0), pages 13-34, October.
    4. Thompson, Russell G. & Langemeier, Larry N. & Lee, Chih-Tah & Lee, Euntaik & Thrall, Robert M., 1990. "The role of multiplier bounds in efficiency analysis with application to Kansas farming," Journal of Econometrics, Elsevier, vol. 46(1-2), pages 93-108.
    5. Agha Iqbal Ali & Wade D. Cook & Lawrence M. Seiford, 1991. "Strict vs. Weak Ordinal Relations for Multipliers in Data Envelopment Analysis," Management Science, INFORMS, vol. 37(6), pages 733-738, June.
    6. Merja Halme & Tarja Joro & Pekka Korhonen & Seppo Salo & Jyrki Wallenius, 1999. "A Value Efficiency Approach to Incorporating Preference Information in Data Envelopment Analysis," Management Science, INFORMS, vol. 45(1), pages 103-115, January.
    7. M. Halme & T. Joro & P. Korhonen & S. Salo & J. Wallenius, 1998. "Value Efficiency Analysis for Incorporating Preference Information in Data Envelopment Analysis," Working Papers ir98054, International Institute for Applied Systems Analysis.
    8. 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.
    9. Kao, Chiang & Chi Yang, Yong, 1992. "Reorganization of forest districts via efficiency measurement," European Journal of Operational Research, Elsevier, vol. 58(3), pages 356-362, May.
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