Improving the discrimination of data envelopment analysis models in multiple time periods

The trade-offs approach is an advanced tool for the improvement of the discrimination of data envelopment analysis (DEA) models; this can improve the traditional meaning of efficiency as a radial improvement factor for inputs or outputs. Therefore, the Malmquist index – the prominent index for measuring the productivity change of decision making units (DMUs) in multiple time periods that use DEA models with variable returns to scale and constant returns to scale technologies – can be improved by using the trade-offs technology. Hence, an expanded Malmquist index can be defined as an improved method of a traditional Malmquist index that uses the production possibility set, which could present more discrimination of DMUs, in the presence of the trade-offs technology. In addition, similar to a traditional Malmquist index, it breaks down into different components. An illustrative example is presented to show the ability of the suggested method of presenting the Malmquist index from a computational point of view.