Alternative Efficiency Measures Research Articles

Efficiency of the Welfare State

In this paper, we present alternative measures of efficiency of the welfare state and of its components. We observe non negligible efficiency slacks in the way benefits are distributed and services produced. We try to explain these slacks and to suggest ways of correcting them. Depending on the case, our exercise can be viewed as providing argument for the dismantling of the welfare state or giving it additional resources when inefficiency can be corrected and the political will to do so exists. Copyright 1999 by WWZ and Helbing & Lichtenhahn Verlag AG

Efficiency of the Welfare State

In this paper, we present alternative measures of efficiency of the welfare state and of its components. We observe non negligible efficiency slacks in the way benefits are distributed and services produced. We try to explain these slacks and to suggest ways of correcting them. Depending on the case, our exercise can be viewed as providing argument for the dismantling of the welfare state or giving it additional resources when inefficiency can be corrected and the political will to do so exists. Copyright 1999 by WWZ and Helbing & Lichtenhahn Verlag AG

Learning from input-output mixes in DEA: a proportional measure for slack-based efficient projections

Several Data Envelopment Analysis (DEA) models use a radial distance measure that is based on the Debreu–Farrell notion of (in)efficiency. While this measure has an attractive interpretation, its use may be problematic if slacks or zeros are present in the data. The additive DEA model can perfectly deal with these problems, but the meaning of its associated scores is less intuitive than the one attached to the radial measures. We introduce an alternative efficiency measure, based on the results of the additive model, that can be decomposed in a Debreu–Farrell component and a factor that captures differences in input–output mixes with respect to those of the best practice reference observation. On an aggregate level, this second component can be considered as an indicator of the dispersion between radial efficiency measurement and results based on the Pareto–Koopmans efficiency notion. On the individual level, the measure allows us to regard relative inefficiency as resulting from (i) a divergence of implicit cost price vectors, and (ii) a cost level that is too high, even after adjustment for the implicit cost prices. Copyright © 1999 John Wiley & Sons, Ltd.

Learning from input–output mixes in DEA: a proportional measure for slack‐based efficient projections

Several Data Envelopment Analysis (DEA) models use a radial distance measure that is based on the Debreu–Farrell notion of (in)efficiency. While this measure has an attractive interpretation, its use may be problematic if slacks or zeros are present in the data. The additive DEA model can perfectly deal with these problems, but the meaning of its associated scores is less intuitive than the one attached to the radial measures. We introduce an alternative efficiency measure, based on the results of the additive model, that can be decomposed in a Debreu–Farrell component and a factor that captures differences in input–output mixes with respect to those of the best practice reference observation. On an aggregate level, this second component can be considered as an indicator of the dispersion between radial efficiency measurement and results based on the Pareto–Koopmans efficiency notion. On the individual level, the measure allows us to regard relative inefficiency as resulting from (i) a divergence of implicit cost price vectors, and (ii) a cost level that is too high, even after adjustment for the implicit cost prices. Copyright © 1999 John Wiley & Sons, Ltd.

A Complete Efficiency Ranking of Decision Making Units in Data Envelopment Analysis

The efficiency measures provided by DEA can be used for ranking Decision Making Units (DMUs), however, this ranking procedure does not yield relative rankings for those units with 100% efficiency. Andersen and Petersen have proposed a modified efficiency measure for efficient units which can be used for ranking, but this ranking breaks down in some cases, and can be unstable when one of the DMUs has a relatively small value for some of its inputs. This paper proposes an alternative efficiency measure, based on a different optimization problem that removes the difficulties.