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σ-µ efficiency analysis: A new methodology for evaluating units through composite indices

Greco, Salvatore and Ishizaka, Alessio and Tasiou, Menelaos and Torrisi, Gianpiero (2018): σ-µ efficiency analysis: A new methodology for evaluating units through composite indices.

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We propose a new methodology to employ composite indicators for performance analysis of units of interest using and extending the family of Stochastic Multiattribute Acceptability Analysis. We start evaluating each unit by means of weighted sums of their elementary indicators in the whole set of admissible weights. For each unit, we compute the mean, �, and the standard deviation, �, of its evaluations. Clearly, the former has to be maximized, while the latter has to be minimized as it denotes instability in the evaluations with respect to the variability of weights. We consider a unit to be Pareto-Koopmans efficient with respect to � and � if there is no convex combination of � and � of the rest of the units with a value of � that is not smaller, and a value of � that is not greater, with at least one strict inequality. The set of all Pareto-Koopmans efficient units constitutes the first Pareto-Koopmans frontier. In the spirit of context-dependent Data Envelopment Analysis, we assign each unit to one of the sequences of Pareto-Koopmans frontiers. We measure the local efficiency of each unit with respect to each frontier, but also its global efficiency taking into account all feasible frontiers in the �

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