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Procedures for Ranking, Technical and Cost Ecient Units: With a Focus on Nonconvexity

Kristiaan Kerstens, Jafar Sadeghi (), Mehdi Toloo () and Ignace van de Woestyne ()
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Jafar Sadeghi: IESEG School of Management and Ivey Business School
Mehdi Toloo: VSB-Technical University of Ostrava
Ignace van de Woestyne: KU Leuven

No 2020-EQM-02, Working Papers from IESEG School of Management

Abstract: This contribution extends the literature on super-eciency 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 eciency, we pay a particular attention on the e ect of nonconvexity on both super-efficiency notions. Apart from a numerical example, we use a secondary data set guaranteeing replication to illustrate these eciency and super-efficiency con- cepts. Two empirical conclusions emerge. First, the cost super-efficiency notion ranks di erently from the technical super-efficiency concept. Second, both cost and technical super-efficiency notions rank di erently under convex and nonconvex technologies.

Keywords: : Data Envelopment Analysis; Free Disposal Hull; Technical Efficiency; Cost Efficiency; Super-efficiency (search for similar items in EconPapers)
JEL-codes: D24 (search for similar items in EconPapers)
Pages: 41 pages
Date: 2020-05
New Economics Papers: this item is included in nep-eff and nep-ore
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