A Note on Imposing Strong Complementary Slackness Conditions in DEA

Vladimir Krivonozhko, Finn Førsund and Andrey V. Lychev
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Vladimir Krivonozhko: Institute for Systems Analysis, Russian Academy of Sciences, Moscow
Andrey V. Lychev: Accounts Chamber of the Russian Federation, Moscow

No 17/2010, Memorandum from Oslo University, Department of Economics

Abstract: A new DEA model has been introduced recently combining the primal and the dual models in order to impose strong complementary slackness conditions. It was claimed that a reference set that contains the maximum number of efficient units can then be determined. The model is very interesting as a theoretical idea. However, not only does the computational burden increase significantly, but it seems also that the basic matrices may be inherently ill-conditioned, leading to wrong results. Numerical experiments have been carried out on two real datasets of medium size with 163 and 920 units. These experiments show pervasive existence of ill-conditioned matrices leading to obviously wrong estimates of efficiency scores, and units declared as efficient reference units while actually being inefficient.

Keywords: Data envelopment analysis; BCC model; DEA/SCSC model; strong complementary slackness conditions (search for similar items in EconPapers)
JEL-codes: C61 D20 (search for similar items in EconPapers)
Pages: 16 pages
Date: 2011-01-03
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Published as Krivonozhko, Vladimir, Finn R. Førsund and Andrey V. Lychev, 'A Note on Imposing Strong Complementary Slackness Conditions in DEA' in european journal of operational research, 2012, pages 716-721.

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Journal Article: A note on imposing strong complementary slackness conditions in DEA (2012)
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