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.

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.

• Item Type: MPRA Paper
• Language: English
• Keywords: Data Envelopment Analysis; Epsilon-based Measure (EBM); Affinity Index
• Subjects: C - Mathematical and Quantitative Methods > C4 - Econometric and Statistical Methods: Special Topics > C44 - Operations Research ; Statistical Decision Theory

References

Charnes, A., Cooper, W. W., & Rhodes, E. (1978). Measuring the efficiency of decision making units. European Journal of Operational Research, 2, 429-444.

Tone, K. (2001). A slacks-based measure of efficiency in data envelopment analysis. European Journal of Operational Research, 130, 498-509.

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.