Procedures for ranking technical and cost efficient units: With a focus on nonconvexity

Kristiaan Kerstens*, Jafar Sadeghi, Mehdi Toloo, Ignace Van de Woestyne

*Corresponding author for this work

Research output: Contribution to journalArticlepeer-review

2 Citations (Scopus)

Abstract

This contribution extends the literature on super-efficiency by focusing on ranking cost-efficient observations. To the best of our knowledge, the focus has always been on technical super-efficiency and this focus on ranking cost-efficient observations may well open up a new topic. Furthermore, since the convexity axiom has both an impact on technical and cost efficiency, we pay a particular attention to the effect of nonconvexity on both super-efficiency notions. Apart from a numerical example, we use a secondary data set guaranteeing replication to illustrate these efficiency and super-efficiency concepts. Two empirical conclusions emerge. First, the cost super-efficiency notion ranks differently from the technical super-efficiency concept. Second, both cost and technical super-efficiency notions rank differently under convex and nonconvex technologies.

Original languageEnglish
Pages (from-to)269-281
Number of pages13
JournalEuropean Journal of Operational Research
Volume300
Issue number1
DOIs
Publication statusPublished - Jul 1 2022

Keywords

  • Cost efficiency
  • Data envelopment analysis
  • Free disposal hull
  • Super-efficiency
  • Technical efficiency

ASJC Scopus subject areas

  • Computer Science(all)
  • Modelling and Simulation
  • Management Science and Operations Research
  • Information Systems and Management

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