Data Envelopment Analysis
Theory and Techniques for Economics and Operations Research

This book, first published in 2004, explores data envelopment analysis, which measures firms' input-output efficiencies using mathematical programming techniques.

Subhash C. Ray (Author)

9781107405264, Cambridge University Press

Paperback / softback, published 19 July 2012

366 pages
22.9 x 15.2 x 1.9 cm, 0.49 kg

"Only a deep understanding of the economics of production can provide an Ariadne's thread to find oneas way through the existing literature on efficiency analysis in general and on the DEA method in particular. In this book, Professor Ray offers the reader an enlightening guidance through this maze, thanks to his equal mastery of the economic conceptual foundations of the field and of the mathematical programming techniques that have rendered it widely applicable. The result is a choice of topics that bear on basic aspects of the efficiency issue more than on technical virtuosity. Among these, the way FDH is put in its proper nonparametric production theoretic perspective pleases me most." Henry Tulkens, CORE, Université Catholique de Louvain

Using the neo-classical theory of production economics as the analytical framework, this book, first published in 2004, provides a unified and easily comprehensible, yet fairly rigorous, exposition of the core literature on data envelopment analysis (DEA) for readers based in different disciplines. The various DEA models are developed as nonparametric alternatives to the econometric models. Apart from the standard fare consisting of the basic input- and output-oriented DEA models formulated by Charnes, Cooper, and Rhodes, and Banker, Charnes, and Cooper, the book covers developments such as the directional distance function, free disposal hull (FDH) analysis, non-radial measures of efficiency, multiplier bounds, mergers and break-up of firms, and measurement of productivity change through the Malmquist total factor productivity index. The chapter on efficiency measurement using market prices provides the critical link between DEA and the neo-classical theory of a competitive firm. The book also covers several forms of stochastic DEA in detail.

1. Introduction and overview
2. Productivity, efficiency, and data envelopment analysis
3. Variable returns to scale: separating technical and scale efficiencies
4. Extensions to the basic DEA models
5. Non-radial models and Pareto-Koopmans measures of technical efficiency
6. Efficiency measurement without convexity assumption: free disposal hull analysis
7. Dealing with slacks: assurance region/cone ratio analysis, weak disposability, and congestion
8. Efficiency of merger and break up of firms
9. Efficiency analysis with market prices
10. Nonparametric approaches to production analysis
11. Measuring total factor productivity change over time
12. Stochastic approaches to data envelopment analysis
13. Looking ahead.

Subject Areas: Numerical analysis [PBKS], Business & management [KJ], Finance [KFF], Economics [KC]