Global multi-period performance evaluation – New model and productivity index

Abstract

In this paper, we introduce a novel multi-period data envelopment analysis (MDEA) model that attempts to circumvent the limitations of the existing MDEA models. The proposed global MDEA model is essentially based on major modifications of fundamental DEA axioms to enable a decision making unit (DMU), defined with inputs and outputs of period t, to be evaluated within the production possibility set (PPS) of another period l, t ≠ l. Building on the properties of the global MDEA model, we also introduce a global productivity index, identified as Global Progress and Regress index (GPRI), that render possible the evaluation of a DMU’s extent of progress or regress over multi-period time horizons under variable returns to scale (VRS) production technologies. This lifts the restrictions to two successive periods and constant returns to scale (CRS) of existing productivity indices. The most salient features of the new MDEA model as well as the GPRI are highlighted using an application that involves a real-life sample of 25 bank branches considered over 4 years.