DEA-R: ratio-based comparative efficiency model, its mathematical relation to DEA and its use in applications

Ozren Despic*, Mladen Despic, Joseph C. Paradi

*Corresponding author for this work

Research output: Contribution to journalArticle

Abstract

We propose a new mathematical model for efficiency analysis, which combines DEA methodology with an old idea-Ratio Analysis. Our model, called DEA-R, treats all possible ratios "output/input" as outputs within the standard DEA model. Although DEA and DEA-R generate different summary measures for efficiency, the two measures are comparable. Our mathematical and empirical comparisons establish the validity of DEA-R model in its own right. The key advantage of DEA-R over DEA is that it allows effective integration of the model with experts' opinions via flexible restrictive conditions on individual "output/input" pairs. © 2007 Springer Science+Business Media, LLC.

Original languageEnglish
Pages (from-to)33-44
Number of pages12
JournalJournal of Productivity Analysis
Volume28
Issue number1-2
DOIs
Publication statusPublished - Oct 2007

Keywords

  • DEA
  • efficiency
  • ratio analysis
  • weight restrictions

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