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Using data envelopment analysis for the assessment of technical efficiency of units with different specialisations: an application to agriculture

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journal contribution
posted on 07.07.2015, 14:38 by Kazin Baris Atici, Victor PodinovskiVictor Podinovski
In this paper we consider the use of data envelopment analysis (DEA) for the assessment of efficiency of units whose output profiles exhibit specialisation. An example of this is found in agriculture where a large number of different crops may be produced in a particular region, but only a few farms actually produce each particular crop. Because of the large number of outputs, the use of conventional DEA models in such applications results in a poor efficiency discrimination. We overcome this problem by specifying production trade-offs between different outputs, relying on the methodology of Podinovski (2004). The main idea of our approach is to relate various outputs to the production of the main output. We illustrate this methodology by an application of DEA involving agricultural farms in different regions of Turkey. An integral part of this application is the elicitation of expert judgements in order to formulate the required production trade-offs. Their use in DEA models results in a significant improvement of the efficiency discrimination. The proposed methodology should also be of interest to other applications of DEA where units may exhibit specialization, such as applications involving hospitals or bank branches.

Funding

This research was partly supported by the European Commission through the Seventh Framework Programme (FP7) project 265616, titled “Integrating Econometric and Mathematical Programming Models into an Amendable Policy and Market Analysis Tool using FADN Database” (FADNTOOL).

History

School

  • Business and Economics

Department

  • Business

Published in

Omega (United Kingdom)

Volume

54

Pages

72 - 83

Citation

ATICI, K.B. and PODINOVSKI, V.V., 2015. Using data envelopment analysis for the assessment of technical efficiency of units with different specialisations: an application to agriculture. Omega, 54, pp.72-83

Publisher

© Elsevier B.V.

Version

AM (Accepted Manuscript)

Publisher statement

This work is made available according to the conditions of the Creative Commons Attribution-NonCommercial-NoDerivatives 4.0 International (CC BY-NC-ND 4.0) licence. Full details of this licence are available at: https://creativecommons.org/licenses/by-nc-nd/4.0/

Publication date

2015

Notes

This paper was accepted for publication in the journal Omega and the definitive published version is available at http://dx.doi.org/10.1016/j.omega.2015.01.015

ISSN

0305-0483

Language

en