Terminal units in DEA: definition and determination

Vladimir Krivonozhko (), Finn Førsund and Andrey Lychev ()

Journal of Productivity Analysis, 2015, vol. 43, issue 2, 164 pages

Abstract: Applications of data envelopment analysis (DEA) models show that inadequate results may arise in some cases, two of these inadequacies being: (1) too many efficient units may appear in some DEA models; (2) a DEA model may show an inefficient unit from the point of view of experts as an efficient one. The purpose of this paper is to identify units that may unduly become efficient. The concept of a terminal unit is introduced for such units. It is shown by establishing theorems how units can be identified as terminal units. An approach for improving the adequacy of DEA models based on terminal units is suggested, and an example shown based on a real-life data set for Russian banks. Copyright Springer Science+Business Media New York 2015

Keywords: Data envelopment analysis (DEA); Terminal units; Efficiency; Weight restrictions; Domination cones; C44; C61; C67; D24 (search for similar items in EconPapers)
Date: 2015
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Citations: View citations in EconPapers (7)

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Working Paper: Terminal units in DEA: Definition and Determination (2011)
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DOI: 10.1007/s11123-013-0375-6

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