Theory of integer-valued data envelopment analysis

Timo Kuosmanen and Reza Kazemi Matin

European Journal of Operational Research, 2009, vol. 192, issue 2, 658-667

Abstract: Conventional data envelopment analysis (DEA) models assume real-valued inputs and outputs. In many occasions, some inputs and/or outputs can only take integer values. In some cases, rounding the DEA solution to the nearest whole number can lead to misleading efficiency assessments and performance targets. This paper develops the axiomatic foundation for DEA in the case of integer-valued data, introducing new axioms of "natural disposability" and "natural divisibility". We derive a DEA production possibility set that satisfies the minimum extrapolation principle under our refined set of axioms. We also present a mixed integer linear programming formula for computing efficiency scores. An empirical application to Iranian university departments illustrates the approach.

Keywords: Data; envelopment; analysis; Efficiency; Mixed; Integer; linear; programming; Production; theory (search for similar items in EconPapers)
Date: 2009
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Citations: View citations in EconPapers (31)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:ejores:v:192:y:2009:i:2:p:658-667

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