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On Value Efficiency Analysis and Cone-Ratio Data Envelopment Analysis models

Author

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  • Giannis Karagiannis

    (Department of Economics, University of Macedonia)

  • Panagiotis Ravanos

    (Department of Economics, University of Macedonia)

Abstract

: In this paper we relate the Value Efficiency Analysis (VEA) efficiency scores with those of three different Cone-Ratio Data Envelopment Analysis (CR-DEA) models, when the chosen model Decision Making Units (DMUs) in CR-DEA jointly comprise the Most Preferred Solution (MPS) in VEA. In particular, we consider the cases where the cone of feasible weight vectors is given respectively by (i) the intersection of the sets containing the weight vectors that are optimal in DEA for each model DMU, (ii) the union of the sets containing the weight vectors that are optimal in DEA for each model DMU, and (iii) only those vectors with strictly positive components, each of which is optimal in DEA for all the model DMUs. In each of these cases we show that the CR-DEA efficiency scores can be obtained or approximated by estimating either a VEA model or a series of VEA models, without the need to a priori identify the cone of feasible weight vectors. We illustrate the usefulness of our results by means of an empirical application using data on Japanese regional banks.

Suggested Citation

  • Giannis Karagiannis & Panagiotis Ravanos, 2023. "On Value Efficiency Analysis and Cone-Ratio Data Envelopment Analysis models," Discussion Paper Series 2023_03, Department of Economics, University of Macedonia, revised Mar 2023.
    • Handle: RePEc:mcd:mcddps:2023_03
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    References listed on IDEAS

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    Keywords

    Data Envelopment Analysis; Value Efficiency Analysis; Cone-Ratio DEA; model DMUs; Most Preferred Solution.;
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