Cross Efficiency Analysis and Extended Facets

Ole Bent Olesen

Data Envelopment Analysis Journal, 2018, vol. 4, issue 1, 27-65

Abstract: The purpose of this paper is to discuss some of the conclusions in a recent paper by Finn Førsund entitled "Cross Efficiency: A Critique". Finn Førsund is criticizing cross-efficiency for lack of economic foundation. I build on extended facet analysis to provide an economic interpretation of each of the different cross-efficiency scores that enters into the "peers' appraisal cross-efficiency averages" of unit j, denoted ECOL(j) in the paper. However, when I consider this new economic interpretation, I end up agreeing with Finn Førsund that it is very difficult to see any meaningful interpretation of these "peers' appraisal cross-efficiency averages".

Keywords: Data envelopment analysis (DEA); simple efficiency; self-appraisal; peer-appraisal; cross-efficiency (search for similar items in EconPapers)
Date: 2018
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Citations: View citations in EconPapers (4)

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Persistent link: https://EconPapers.repec.org/RePEc:now:jnldea:103.00000023

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