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A comment on “solving the puzzles of structural efficiency”

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  • Fang, Lei
  • Li, Hecheng

Abstract

In a recent paper by Li and Cheng [Li,S.K., Cheng, Y.S., 2007. Solving the puzzles of structural efficiency. European Journal of Operational Research 180(2), 713–722], they developed the shadow price model to solve the existing puzzles of structural efficiency theoretically. However, we observe that the optimal shadow price vector in the shadow price model by Li and Cheng (2007) is not always unique. As a result, the decomposition of the structural efficiency is arbitrarily generated, depending on the shadow price vector we choose. Finally, an example with multiple inputs and outputs is used to illustrate the phenomenon.

Suggested Citation

  • Fang, Lei & Li, Hecheng, 2013. "A comment on “solving the puzzles of structural efficiency”," European Journal of Operational Research, Elsevier, vol. 230(2), pages 444-446.
    • Handle: RePEc:eee:ejores:v:230:y:2013:i:2:p:444-446
    DOI: 10.1016/j.ejor.2013.04.037
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    References listed on IDEAS

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    1. Forsund, Finn R & Hjalmarsson, Lennart, 1979. "Generalised Farrell Measures of Efficiency: An Application to Milk Processing in Swedish Dairy Plants," Economic Journal, Royal Economic Society, vol. 89(354), pages 294-315, June.
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    5. Li, Sung-ko & Cheng, Yuk-shing, 2007. "Solving the puzzles of structural efficiency," European Journal of Operational Research, Elsevier, vol. 180(2), pages 713-722, July.
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    7. Cecilio Mar-Molinero & Diego Prior & Maria-Manuela Segovia & Fabiola Portillo, 2014. "On centralized resource utilization and its reallocation by using DEA," Annals of Operations Research, Springer, vol. 221(1), pages 273-283, October.
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    Cited by:

    1. Chih-Ching Yang, 2017. "Measuring health indicators and allocating health resources: a DEA-based approach," Health Care Management Science, Springer, vol. 20(3), pages 365-378, September.
    2. Färe, Rolf & Karagiannis, Giannis, 2017. "The denominator rule for share-weighting aggregation," European Journal of Operational Research, Elsevier, vol. 260(3), pages 1175-1180.
    3. Färe, Rolf & Karagiannis, Giannis, 2014. "A postscript on aggregate Farrell efficiencies," European Journal of Operational Research, Elsevier, vol. 233(3), pages 784-786.
    4. Giannis Karagiannis, 2015. "On structural and average technical efficiency," Journal of Productivity Analysis, Springer, vol. 43(3), pages 259-267, June.

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