Non-discretionary inputs in data envelopment analysis

Non-discretionary inputs in data envelopment analysis

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Article ID: iaor20001227
Country: Netherlands
Volume: 111
Issue: 3
Start Page Number: 461
End Page Number: 469
Publication Date: Dec 1998
Journal: European Journal of Operational Research
Authors:
Abstract:

The technique for efficiency measurement known as Data Envelopment Analysis (DEA) has been extended to allow non-discretionary inputs that affect production. Several methods exist for measuring efficiency while controlling for these fixed factors of production. This paper reviews these approaches, providing a discussion of strengths and weaknesses and highlighting potential limitations. In addition, a new approach is developed that overcomes existing weaknesses. To facilitate comparison, an analysis using simulated data is performed. The results show that the new approach improves existing models and performs relatively well.

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