A novel method for computing single output for DEA with application in hospital efficiency

M. Ensar Yeşilyurt, Emre Şahin, M. Doğan Elbi, Aydın Kızılkaya, M. Ulaş Koyuncuoğlu and Filiz Akbaş-Yeşilyurt

Socio-Economic Planning Sciences, 2021, vol. 76, issue C

Abstract: There are two main methods for measuring the efficiency of decision-making units (DMUs): data envelopment analysis (DEA) and stochastic frontier analysis (SFA). Each of these methods has advantages and disadvantages. DEA is more popular in the literature due to its simplicity, as it does not require any pre-assumption and can be used for measuring the efficiency of DMUs with multiple inputs and multiple outputs, whereas SFA is a parametric approach that is applicable to multiple inputs and a single output. Since many applied studies feature multiple output variables, SFA cannot be used in such cases. In this research, a unique method to transform multiple outputs to a virtual single output is proposed. We are thus able to obtain efficiency scores from calculated virtual single output by the proposed method that are close (or even the same depending on targeted parameters at the expense of computation time and resources) to the efficiency scores obtained from multiple outputs of DEA. This will enable us to use SFA with a virtual single output. The proposed method is validated using a simulation study, and its usefulness is demonstrated with real application by using a hospital dataset from Turkey.

Keywords: Data envelopment analysis; Stochastic frontier analysis; Particle swarm optimization; Single output; Hospital efficiency; Public sector efficiency (search for similar items in EconPapers)
Date: 2021
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (3)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:soceps:v:76:y:2021:i:c:s0038012120308326

DOI: 10.1016/j.seps.2020.100995

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