Biases in technical efficiency scores caused by intra-input aggregation: mathematical analysis and a DEA application using simulated data

Autor: Darold T. Barnum, John M. Gleason
Rok vydání: 2006
Předmět:
Zdroj: Applied Economics. 38:1593-1603
ISSN: 1466-4283
0003-6846
DOI: 10.1080/00036840500405714
Popis: In Data Envelopment Analysis (DEA) applications involving multiple inputs and outputs, inputs are aggregated into the total amounts of each type of input. For example, if input types ‘labour’ and ‘capital’ are used to produce multiple outputs, the total amount of labour used to produce all outputs is treated as one aggregated input and the total amount of capital as another. Resources are not disaggregated into input variables measuring the amount of labour used to produce the first output, the amount of labour used to produce the second output, the amount of labour used to produce the third output and so on, for both labour and capital. It is shown that such intra-input aggregation causes downward bias in reported technical efficiency scores, with variations in bias unrelated to true technical efficiency. Therefore, with few exceptions, any technical efficiency comparisons among DMUs are invalid. The presence of intra-input aggregation bias is demonstrated mathematically, simulation is used to exhibit it...
Databáze: OpenAIRE
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