A note on simulating weights restrictions in DEA: an improvement of Thanassoulis and Allen's method

Data envelopment analysis (DEA) is a nonparametric technique for measuring and assessing the comparative efficiencies of decision making units (DMUs). Weights restrictions are often imposed on these assessments and create many problems in interpretations of results. This paper focuses on one of those and reviews unobserved DMUs method, introduced by Thanassoulis and Allen, to overcome this problem. This paper clarifies the method proposed by them for specifying full set of unobserved DMUs (FSUD) and reduced set of unobserved DMUs (RSUD) as two sets of unobserved DMUs, too. It is indicated that this method is not suitable for some cases and a simple approach is introduced to identify and eliminate redundant unobserved DMUs and specify a new RSUD convenient for all cases.