Article ID: | iaor20114873 |
Volume: | 62 |
Issue: | 7 |
Start Page Number: | 1413 |
End Page Number: | 1419 |
Publication Date: | Jul 2011 |
Journal: | Journal of the Operational Research Society |
Authors: | Kerstens K, Van de Woestyne I |
Keywords: | frontier analysis |
The need to adapt Data Envelopment Analysis (DEA) and other frontier models in the context of negative data has been a rather neglected issue in the literature. A recent article in this journal proposed a variation on the directional distance function, a very general distance function that is dual to the profit function, to accommodate the occurrence of negative data. In this contribution, we define and recommend a generalised Farrell proportional distance function that can do the same job and that maintains a proportional interpretation under mild conditions.