Value of the stochastic efficiency in data envelopment analysis

Charles, Vincent and Cornillier, Fabien (2017) Value of the stochastic efficiency in data envelopment analysis. Expert Systems with Applications, 81. pp. 349-357. ISSN 0957-4174 (In Press)

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Abstract

This article examines the potential benefits of solving a stochastic DEA model over solving a deterministic DEA model. It demonstrates that wrong decisions could be made whenever a possible stochastic DEA problem is solved when the stochastic information is either unobserved or limited to a measure of central tendency. We propose two linear models: a semi-stochastic model where the inputs of the DMU of interest are treated as random while the inputs of the other DMUs are frozen at their expected values, and a stochastic model where the inputs of all of the DMUs are treated as random. These two models can be used with any empirical distribution in a Monte Carlo sampling approach. We also define the value of the stochastic efficiency (or semi-stochastic efficiency) and the expected value of the efficiency.

Item Type: Article
Uncontrolled Keywords: Data Envelopment Analysis; Stochastic; Input-Output Analysis; Performance/Productivity
Subjects: H Social Sciences > HA Statistics
H Social Sciences > HB Economic Theory
H Social Sciences > HD Industries. Land use. Labor > HD28 Management. Industrial Management
Q Science > QA Mathematics > QA75 Electronic computers. Computer science
Divisions: School of Business > Management
Depositing User: V Charles
Date Deposited: 10 Apr 2017 14:11
Last Modified: 18 Apr 2017 14:32
URI: http://bear.buckingham.ac.uk/id/eprint/169

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