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A free coordination hull approach to efficiency measurement

Author

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  • R H Green

    (University of Bath
    University of South Australia)

  • W D Cook

    (York University)

Abstract

Superficially, the free disposal hull production possibility set (pps) can be regarded as a binary version of the Banker, Charnes and Cooper pps, in which only one component of the vector, λ, is non-zero and of necessity equal to 1. We therefore propose, by analogy with a pps due originally to Koopmans, a new pps which retains the binary characteristic of the components of λ but permits more than one component to be non-zero. Thus, a given DMU's performance is assessed not only against the individual DMUs included in the sample but also against composite DMUs obtained by simple aggregation. This approach is demonstrated and investigated on a published data set.

Suggested Citation

  • R H Green & W D Cook, 2004. "A free coordination hull approach to efficiency measurement," Journal of the Operational Research Society, Palgrave Macmillan;The OR Society, vol. 55(10), pages 1059-1063, October.
    • Handle: RePEc:pal:jorsoc:v:55:y:2004:i:10:d:10.1057_palgrave.jors.2601773
    DOI: 10.1057/palgrave.jors.2601773
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    3. S Blancard & J-P Boussemart & H Leleu, 2011. "Measuring potential gains from specialization under non-convex technologies," Journal of the Operational Research Society, Palgrave Macmillan;The OR Society, vol. 62(10), pages 1871-1880, October.
    4. Rym Ayadi & Jean-Philippe Boussemart & Hervé Leleu & Dhafer Saidane, 2010. "Mergers & Acquisitions in European Banking Higher productivity or better synergy among business lines?," Working Papers 2011-ECO-03, IESEG School of Management.
    5. Walter Briec & Kristiaan Kerstens & Ignace Van de Woestyne, 2022. "Nonconvexity in Production and Cost Functions: An Exploratory and Selective Review," Springer Books, in: Subhash C. Ray & Robert G. Chambers & Subal C. Kumbhakar (ed.), Handbook of Production Economics, chapter 18, pages 721-754, Springer.
    6. Gary Ferrier & Hervé Leleu & James Moises & Vivian Valdmanis, 2013. "The Focus Efficiency of U.S. Hospitals," Atlantic Economic Journal, Springer;International Atlantic Economic Society, vol. 41(3), pages 241-263, September.
    7. Liesiö, Juuso & Andelmin, Juho & Salo, Ahti, 2020. "Efficient allocation of resources to a portfolio of decision making units," European Journal of Operational Research, Elsevier, vol. 286(2), pages 619-636.
    8. Blancard, Stéphane & Boussemart, Jean-Philippe & Chavas, Jean-Paul & Leleu, Hervé, 2016. "Potential gains from specialization and diversification further to the reorganization of activities," Omega, Elsevier, vol. 63(C), pages 60-68.
    9. Gary D. Ferrier & Hervé Leleu & James Moises & Vivian Valdmanis, 2009. "The Size and Service Offering Efficiencies of U.S. Hospitals," Working Papers 2009-ECO-09, IESEG School of Management.
    10. Kwansoo Kim & Donghwan An, 2015. "Nonparametric Evaluation of Economies of Scope in the Context of Technical Efficiency: The Case of Rice and Vegetable Farms in Korea," Asian Economic Journal, East Asian Economic Association, vol. 29(3), pages 285-301, September.
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