Overlooked effect of negative data on efficiency analysis

Wen-Min Lu (), Qian Long Kweh () and Irene Wei Kiong Ting ()
Additional contact information
Wen-Min Lu: Chinese Culture University
Qian Long Kweh: Canadian University Dubai
Irene Wei Kiong Ting: Universiti Malaysia Pahang Al-Sultan Abdullah

OPSEARCH, 2025, vol. 62, issue 2, No 24, 1082-1091

Abstract: Abstract Financial data may contain nonpositive values, which can be addressed using logarithm transformation or the addition of constant. However, production scale is important when employing data envelopment analysis (DEA) to assess the efficiency of input-output transformation. Traditional techniques of handling negative data values in DEA, such as adding an arbitrary constant or substituting a small positive value, fail to account for the effect of production scale on efficiency and can produce misleading findings. This study thus proposes a novel method for dealing with negative output values in DEA by revising them based on production scale. Overall, this study enables better informed decision-making by improving the accuracy of efficiency assessments in complex data settings containing both positive and negative values.

Keywords: Negative data; Data envelopment analysis; Production scale (search for similar items in EconPapers)
Date: 2025
References: Add references at CitEc
Citations:

Downloads: (external link)
http://link.springer.com/10.1007/s12597-024-00797-7 Abstract (text/html)
Access to the full text of the articles in this series is restricted.

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:spr:opsear:v:62:y:2025:i:2:d:10.1007_s12597-024-00797-7

Ordering information: This journal article can be ordered from
http://www.springer. ... search/journal/12597

DOI: 10.1007/s12597-024-00797-7

Access Statistics for this article

OPSEARCH is currently edited by Birendra Mandal

More articles in OPSEARCH from Springer, Operational Research Society of India
Bibliographic data for series maintained by Sonal Shukla () and Springer Nature Abstracting and Indexing ().