Measuring overall efficiency and effectiveness using Data Envelopment Analysis

This paper presents a framework where data envelopment analysis (DEA) is used to measure overall efficiency and shows how to apply this framework to assess effectiveness for more general behavioral goals. The relationships between various cone-ratio DEA models and models to measure overall efficiency are clarified. Specifically it is shown that as multiplier cones tighten, the cone-ratio DEA models converge to measures of overall efficiency. Furthermore, it is argued that multiplier cone and cone-ratio model selection must be consistent with the behavioral goals assigned or assumed for purposes of analysis. Consistent with this reasoning, two new models are introduced to measure effectiveness when value measures are represented by separable or linked cones, where the latter can be used to analyze profit-maximizing effectiveness.