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An epsilon-based measure of efficiency in DEA - An alternative method for the affinity index

Cheng, Gang and Qian, Zhenhua (2011): An epsilon-based measure of efficiency in DEA - An alternative method for the affinity index.

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Abstract

Tone & Tsutsui (2010) introduced a hybrid model (epsilon-based measure, EBM), which combines both radial and non-radial measures in a unified framework [Tone, K., & Tsutsui, M. (2010). An epsilon-based measure of efficiency in DEA - A third pole of technical efficiency. European Journal of Operational Research, 207, 1554-1563.]. We find that their method to construct the affinity matrix may be questionable. Their method may not reflect the true degree of scattered distribution of inputs or outputs. Based on Tone & Tsutsui’s idea, we introduced an alternative method of constructing the affinity matrix, which overcomes the drawback of their method.

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