Efficiency evaluation in data envelopment analysis using strong defining hyperplanes

Andreas Dellnitz (), Elmar Reucher () and Andreas Kleine ()
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Andreas Dellnitz: FernUniversität in Hagen Department of Operations Research
Elmar Reucher: Private Hochschule für Wirtschaft und Technik
Andreas Kleine: FernUniversität in Hagen

OR Spectrum: Quantitative Approaches in Management, 2021, vol. 43, issue 2, No 4, 465 pages

Abstract: Abstract Cross-efficiency analysis in DEA generally uses a two-stage procedure: first, optimize a DMU’s individual efficiency score; next, push the efficiencies of all DMUs in a desired direction. In order to reduce subjective judgement in the second step, we provide a cross-efficiency method using only strong defining hyperplanes of the underlying technology. We develop a new DEA-based algorithm, and prove its finiteness and correctness. To reduce the computational burden, we show how one can combine the procedure with a known beneath-and-beyond procedure. Numerical investigations—comprising real-world data—demonstrate the superiority of the new method.

Keywords: Data envelopment analysis; Facet analysis; Strong defining hyperplanes; Cross-efficiency evaluation (search for similar items in EconPapers)
Date: 2021
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DOI: 10.1007/s00291-021-00623-2

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