A slack-based measure of efficiency in context-dependent data envelopment analysis

Hiroshi Morita, Koichiro Hirokawa and Joe Zhu

Omega, 2005, vol. 33, issue 4, 357-362

Abstract: Data envelopment analysis (DEA) has been proven as an excellent data-oriented performance evaluation method when multiple inputs and outputs are present in a set of peer decision-making units (DMUs). In the DEA literature, a context-dependent DEA is developed to provide finer evaluation results by examining the efficiency of DMUs in specific performance levels based upon radial DEA efficiency scores. In DEA, non-zero input and output slacks are very likely to present after the radial efficiency score improvement. Often, these non-zero slack values represent a substantial amount of inefficiency. Therefore, in order to fully measure the inefficiency in DMU's performance, it is very important to also consider the inefficiency represented by the non-zero slacks in the context-dependent DEA. This study proposes a slack-based context-dependent DEA which allows a full evaluation of inefficiency in a DMUs performance. By using slack-based efficiency measure, we obtain different frontier levels and more appropriate performance benchmarks for inefficient DMUs.

Keywords: Slack-based; efficiency; measure; Context-dependent; DEA; Benchmarking (search for similar items in EconPapers)
Date: 2005
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Citations: View citations in EconPapers (33)

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