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Russell and slack-based measures of efficiency: A unifying framework

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  • Zelenyuk, Valentin
  • Zhao, Shirong

Abstract

Some of the popular technical efficiency measures are not able to account for potential slacks in inputs or outputs and may misrepresent the degree of inefficiency pertinent to firms, industries, and countries when compared to their peers. A wide range of methods have been proposed in the literature over the last four decades to address this important issue. The precise relationship among many of these methods is not always clear. In this paper we briefly review this literature and propose a unifying framework for such measures, one which embraces many other important approaches in efficiency measurement (including slack-based measures, Russell efficiency measures, etc.) as special cases in this general framework. A numerical example is also presented to illustrate the differences among the special cases of the efficiency measures, complemented with the computational code in R for practitioners interested in using these models.

Suggested Citation

  • Zelenyuk, Valentin & Zhao, Shirong, 2024. "Russell and slack-based measures of efficiency: A unifying framework," European Journal of Operational Research, Elsevier, vol. 318(3), pages 867-876.
    • Handle: RePEc:eee:ejores:v:318:y:2024:i:3:p:867-876
    DOI: 10.1016/j.ejor.2024.06.014
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    More about this item

    Keywords

    Russell efficiency; Slack-based efficiency; Non-parametric efficiency estimators; Data Envelopment Analysis;
    All these keywords.

    JEL classification:

    • C14 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods and Methodology: General - - - Semiparametric and Nonparametric Methods: General
    • C44 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods: Special Topics - - - Operations Research; Statistical Decision Theory
    • D24 - Microeconomics - - Production and Organizations - - - Production; Cost; Capital; Capital, Total Factor, and Multifactor Productivity; Capacity
    • L25 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Firm Performance

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