Inefficiency Measuring With DEA
Data Envelopment Analysis (DEA) has been recognized as a valuable analytical research instrument and a practical decision support tool. DEA has been credited for not requiring a complete specification for the functional form of the production frontier nor the distribution of inefficient deviations from the frontier. Rather, DEA requires general production and distribution assumptions only. However, if those assumptions are too weak, inefficiency levels may be systematically underestimated in small samples. In addition, erroneous assumptions may cause inconsistency with a bias over the frontier. Therefore, the ability to alter, test and select production assumptions is essential in conducting DEA-based research. However, the DEA models currently available offer a limited variety of alternative production assumptions only.
Read more about this topic: Data Envelopment Analysis
Famous quotes containing the words inefficiency and/or measuring:
“Men will not give up their privilege of helplessness without a struggle. The average man has a carefully cultivated ignorance about household matters—from what to do with the crumbs to the grocer’s telephone number—a sort of cheerful inefficiency which protects him better than the reputation for having a violent temper.”
—Crystal Eastman (1881–1928)
“We recognize caste in dogs because we rank ourselves by the familiar dog system, a ladderlike social arrangement wherein one individual outranks all others, the next outranks all but the first, and so on down the hierarchy. But the cat system is more like a wheel, with a high-ranking cat at the hub and the others arranged around the rim, all reluctantly acknowledging the superiority of the despot but not necessarily measuring themselves against one another.”
—Elizabeth Marshall Thomas. “Strong and Sensitive Cats,” Atlantic Monthly (July 1994)