Procedures for ranking technical and cost efficient units: With a focus on nonconvexity

Kristiaan Kerstens, Jafar Sadeghi, Mehdi Toloo and Ignace van de Woestyne

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Abstract: This contribution extends the literature on super-efficiency by focusing on ranking cost-efficient observations. To the best of our knowledge, the focus has always been on technical super-efficiency and this focus on ranking cost-efficient observations may well open up a new topic. Furthermore, since the convexity axiom has both an impact on technical and cost efficiency, we pay a particular attention to the effect of nonconvexity on both super-efficiency notions. Apart from a numerical example, we use a secondary data set guaranteeing replication to illustrate these efficiency and super-efficiency concepts. Two empirical conclusions emerge. First, the cost super-efficiency notion ranks differently from the technical super-efficiency concept. Second, both cost and technical super-efficiency notions rank differently under convex and nonconvex technologies.

Keywords: Data envelopment analysis; Free disposal hull; Technical efficiency; Cost efficiency; Super-efficiency (search for similar items in EconPapers)
Date: 2022-07-01
New Economics Papers: this item is included in nep-eff
Note: View the original document on HAL open archive server: https://hal.science/hal-03595989
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Citations: View citations in EconPapers (2)

Published in European Journal of Operational Research, 2022, 300 (1), pp.269-281. ⟨10.1016/j.ejor.2021.10.023⟩

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Journal Article: Procedures for ranking technical and cost efficient units: With a focus on nonconvexity (2022)
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Persistent link: https://EconPapers.repec.org/RePEc:hal:journl:hal-03595989

DOI: 10.1016/j.ejor.2021.10.023

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