Data envelopment analysis cross-efficiency method of non-homogeneous decision-making units

Lei Chen and Ying-Ming Wang

Journal of the Operational Research Society, 2023, vol. 74, issue 4, 1118-1132

Abstract: Faced with a large number of the efficiency evaluation problems with non-homogeneous decision-making units (DMUs) in reality, the existing efficiency evaluation methods are always unfair in terms of evaluation perspective and inputs/outputs allocation. Therefore, this paper adopts the concept of network data envelopment analysis (DEA) to define the inclusion relationship of production structure between non-homogeneous DMUs. Sequentially, the DEA cross-efficiency model and its corresponding cross-evaluation strategy are constructed by combining the self-evaluation perspective with peer-evaluation perspective, and then the efficiency of these DMUs can be evaluated in a more objective and reasonable way. Actually, the cross-evaluation perspective can fully reflect the effect of non-homogeneous structure on efficiency. In addition, the inclusion relationship is extended to a mixed relationship, and the application scope of the new cross-efficiency method is thus further expended. Finally, two examples are provided to illustrate the effectiveness of the new method.

Date: 2023
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DOI: 10.1080/01605682.2022.2056535

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