Using data envelopment analysis for the assessment of technical efficiency of units with different specialisations: An application to agriculture |
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| Affiliation: | 1. Department of Business Administration, Hacettepe University, Ankara, Turkey;2. Warwick Business School, University of Warwick, Coventry CV4 7AL, UK;1. Institute of Applied Mathematics, Department of Logistics, Wroclaw University of Economics, ul. Komandorska 118/120, 53-345 Wroclaw, Poland;2. Business Economics Group, Wageningen University, Hollandseweg 1, 6706 KN Wageningen, Netherlands;3. Food and Resource Economics Department, University of Florida, McCarty Hall A (MCCA), P.O. Box 110240, Gainesville, FL 32611-0240, USA;1. Department of Management Sciences, City University of Hong Kong, Tat Chee Ave, Kowloon Tong, Hong Kong;2. School of Physical and Mathematical Sciences, Nanyang Technological University, Singapore 637371, Singapore;1. Faculty of Business and Information Technology, University of Ontario Institute of Technology (UOIT), Oshawa, ON, Canada L1H 7K4;2. Faculty of Business, Athabasca University, Canada;1. École des Mines de Saint-Étienne, Department of Manufacturing Sciences and Logistics, CMP, Site Georges Charpak, CNRS UMR 6158 LIMOS, 880 avenue de Mimet, 13541 Gardanne, France;2. Soitec, Parc Technologique des Fontaines, 38190 Bernin, France |
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| Abstract: | ![]()
In this paper we consider the use of data envelopment analysis (DEA) for the assessment of efficiency of units whose output profiles exhibit specialisation. An example of this is found in agriculture where a large number of different crops may be produced in a particular region, but only a few farms actually produce each particular crop. Because of the large number of outputs, the use of conventional DEA models in such applications results in a poor efficiency discrimination. We overcome this problem by specifying production trade-offs between different outputs, relying on the methodology of Podinovski (J Oper Res Soc 2004;55:1311–22). The main idea of our approach is to relate various outputs to the production of the main output. We illustrate this methodology by an application of DEA involving agricultural farms in different regions of Turkey. An integral part of this application is the elicitation of expert judgements in order to formulate the required production trade-offs. Their use in DEA models results in a significant improvement of the efficiency discrimination. The proposed methodology should also be of interest to other applications of DEA where units may exhibit specialization, such as applications involving hospitals or bank branches. |
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| Keywords: | Data envelopment analysis Trade-offs Weight restrictions Non-homogeneity Agriculture |
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