Ranking Production Units According to Marginal Efficiency Contribution
Mojtaba Ghiyasi and
Jens Hougaard ()
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Mojtaba Ghiyasi: Centre of Health Economics Research, University of Southern Denmark
No 04_2014, MSAP Working Paper Series from University of Copenhagen, Department of Food and Resource Economics
League tables associated with various forms of service activities from schools to hospitals illustrate the public need for ranking institutions by their productive performance. We present a new method for ranking production units which is based on each units marginal contribution to the technical efficiency of various “mergers” relative to a common reference technology. The approach is radically different from the usual one based on super-efficiency indexes in DEA. We illustrate the mechanics of our method by a series of numerical examples and further demonstrate that our new index inherits all relevant and desirable properties of the Farrell efficiency index upon which it is constructed.
Keywords: Production units; Ranking; Marginal efficiency contribution; DEA; Super efficiency; Contribution index (search for similar items in EconPapers)
Pages: 21 pages
New Economics Papers: this item is included in nep-eff
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Persistent link: https://EconPapers.repec.org/RePEc:foi:msapwp:04_2014
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