Finding closest targets in non-oriented DEA models: the case of convex and non-convex technologies

This paper draws attention for the fact that traditional Data Envelopment Analysis (DEA) models do not provide the closest possible targets (or peers) to inefficient units, and presents a procedure to obtain such targets. It focuses on non-oriented efficiency measures (which assume that production units are able to control, and thus change, inputs and outputs simultaneously) both measured in relation to a Free Disposal Hull (FDH) technology and in relation to a convex technology. The approaches developed for finding close targets are applied to a sample of Portuguese bank branches

Efficient and close targets in data envelopment analysis (DEA)

This paper draws attention for the fact that traditional Data Envelopment Analysis (DEA) models do not provide the closest possible targets (or peers) to inefficient units, and presents a procedure to obtain such targets. It focuses on non-oriented efficiency measures both measured in relation to a Free Disposal Hull (FDH) technology and in relation to a convex technology. The approaches developed for finding close targets are applied to a sample of Portuguese bank branches

Efficiency of Financial Institutions: International Survey and Directions for Future Research

This paper surveys 130 studies that apply frontier efficiency analysis to financial institutions in 21 countries. The primary goals are to summarize and critically review empirical estimates of financial institution efficiency and to attempt to arrive at a consensus view. We find that the various efficiency methods do not necessarily yield consistent results and suggest some ways that these methods might be improved to bring about findings that are more consistent, accurate, and useful. Secondary goals are to address the implications of efficiency results for financial institutions in the areas of government policy, research, and managerial performance. Areas needing additional research are also outlined.

The measure of English and Welsh police force efficiency: a comparison of distance function models

Since the Labour government came to power in 1997, it has introduced a regime whereby public services are accountable in respect of best value performance indicators (BVPIs). A recent Public Services Productivity Panel (PSP) (2000) report has developed a set of criteria whereby the economic analysis of police force efficiency by the Home Office is to be made standard. In this paper we utilise an innovative distance function strategy in contrast to the standard efficiency techniques (Data Envelopment Analysis and Stochastic cost Frontier Analysis) advocated in PSP (2000). We present results from four different distance function models; Data Envelopment Analysis; Free Disposal Hull; Super- Efficiency; and Stochastic Frontier Analysis; in order to assess police force efficiency during the sample period 1996 – 1999

Determinants of health sector efficiency: evidence from a two-step analysis on 30 OECD countries

This study aims to assess the efficiency of expenditure on health in 30 OECD countries over the period 2005-2015 by regressing Data Envelopment Analysis (DEA) output efficiency scores on discretionary and non-discretionary variables, with a two-stage DEA/Tobit and bootstrap procedure. We show that health inefficiency in OECD countries is related to per capita GDP, vaccine coverage and tobacco consumption, also controlling for geographical and institutional variables (i.e., bureaucratic red tape and weather temperature)

Riigiasutuse soorituse hindamine ebakindla nõudluse tingimustes Eesti, Soome ja Rootsi päästeteenuste näitel

Uuringuprobleem. Kui riigiasutus jaotab oma ressursse, on nõudlus nende teenuste järele tihti kindlalt teadmata. Omamata täielikku teavet nõudlusest, kindlustab otsustaja ennast nõudlusšokkide vastu täiendavate ressurssidega (suurendab valmisolekut). Kulu- ja tõhususanalüüsid eeldavad üldjuhul, et nõudlust iseloomustavad parameetrid on teada (või ei pöörata sellele tähelepanu), mis on aga ebarealistlik ega arvesta teenuse osutamise keerukusega riigiasutuses. Enamasti toob see kaasa soorituse tõhususe liiga madala hinnangu. Üleliigset ressursivarustatust (valmisolekut) teenuste osutamiseks võib osaliselt selgitada otsustajate riskikartliku käitumisega, mistõttu peaks riskihinnang olema osa soorituse hinnangust, vältimaks sellise ressursivarustatuse käsitlemist ebatõhususena. Ex ante, võttes arvesse oodatud nõudlust, võib ressursside jaotus olla optimaalne, kuid mitte ex post, kui on teada reaalne nõudluse tase. Doktoritöö eesmärgiks oli välja töötada teoreetiline kontseptsioon ja rakendus, kuidas hinnata sooritust riigiasutuses, mis toimib ebakindla nõudluse tingimustes. Et hinnata mitme üksusega ja mitmel tasandil toimivat teenuseid osutavat riigiasutust ebakindla nõudluse tingimustes, loodi süsteem, milles hinnati (a) keskse riigiasutuse kulutõhusust, (b) allüksuste alavarustatust ja (c) allüksuste väljundtõhusust. Soorituse hindamiseks kasutati piirianalüüsi meetodeid (DEA, FDH, DFA) ning kontseptsiooni rakendati Eesti, Soome ja Rootsi päästevaldkonna näitel. Tulemused ja tähtsus. Päästeteenuseid pakutakse mitmete allüksuste poolt erinevates piirkondades. Teenuste osutaja otsustab esialgselt, kuidas ressursid (päästjad, masinad) erinevates piirkondades jaotada, teadmata seejuures, kui palju päästesündmusi seal tegelikult aset leiab. Allüksused hoiavad teatud valmisoleku taset, et vajaduse korral päästesündmusele reageerida. Valmisoleku tagamine on aga kõige kulukam komponent eelarves, mistõttu on oluline, et ressursid oleks jaotatud nii, et ei tekiks liigseid kulusid, st minimeeritakse valmisoleku taset optimaalse mahu ja kvaliteediga päästeteenuse pakkumiseks. Saadud tulemused näitavad veenvalt, et mudelid, mis arvestavad nõudluse ebakindlusega, hindavad kulutõhususe kõrgemaks kui standardsed mudelid, olenemata hindamismeetodist või hinnatud riigist.Description of the Problem. When planning the allocation of resources in public agencies, the demand for services is often unknown and prone to uncertainty. Without having the full information of the possible demand, the decision maker will insure oneself with additional standby capacity against upsurges in demand. Cost and efficiency studies predominantly assume known demand, which is unrealistic and hinders understanding the essence of service provision in public agencies. In many cases, it has probably resulted in underestimation of efficiency. The observed excess capacity can partly be explained by risk averse behaviour and should be incorporated to the analysis to avoid unjustly labelling such input usage as inefficiency. Ex ante, given expected demand, the resource allocation is optimal, but not ex post, given realised levels of demand. The challenge is to distinguish the necessary standby capacity from excessive mismanagement. This thesis develops the theoretical concept and application to measure the performance of public agencies in the case of demand uncertainty. To evaluate the efficiency of a multi-unit and multilevel service providing public agency in the presence of demand uncertainty, one is interested in: (a) the cost-efficiency of the central agency, (b) any under-resourcing of subunits, and (c) the output-oriented technical efficiency of each subunit in jurisdictions. The suggested models would be the basis for planning resource allocation improvement in public agencies. The models are implemented using the example of the Estonian, Finnish and Swedish fire and rescue services. For estimation, different frontier analysis methods (DEA, FDH, DFA) are proposed. Result and Benefit. Typically, the rescue authority decides beforehand to allocate resources (rescuers, vehicles, etc.) between different subunits in jurisdictions without knowing how many emergencies will occur. The subunits must maintain a certain level of standby capacity to be able to respond to emergencies. Sustaining the readiness, however, is the most expensive component in the running costs. The results show convincingly that the models taking the demand uncertainty in the form of minimum service level into account, estimate a higher cost-efficiency irrespective of the estimation method or country (with different level of centralisation for management) analysed

Complete Closest-Target Based Directional FDH Measures of Efficiency in DEA

In this paper, we aim to overcome three major shortcomings of the FDH (Free Disposal Hull) directional distance function through developing two new, named Linear and Fractional CDFDH, complete FDH measures of efficiency. To accomplish this, we integrate the concepts of similarity and FDH directional distance function. We prove that the proposed measures are translation invariant and unit invariant. In addition, we present effective enumeration algorithms to compute them. Our proposed measures have several practical advantages such as: (a) providing closest Pareto-efficient observed targets (b) incorporating the decision maker’s preference information into efficiency analysis and (c) being flexible in computer programming. We illustrate the newly developed approach with a real world data set

FINANCIAL AND SOCIAL EFFICIENCY ON INDONESIAN ISLAMIC BANKS: A NON-PARAMETRIC APPROACH

This paper explores financial and social efficiency in one assessment framework. In order to measure efficiency level of Islamic Banking Industry, this study uses Data Envelopment Analysis (DEA) and Free Disposal Hull (FDH) methods. The results show that the level of financial efficiency of Islamic banks in Indonesia from 2013 to 2018 tends to decrease. On the contrary, the level of social efficiency of Islamic banks in Indonesia has a tendency to increase. Furthermore, the value of social efficiency of Islamic banks in Indonesia was relatively lower compared to the value of financial efficiency. Within the Financial-Social Efficiency Quadrant framework, the study classified two Islamic banks in quadrant 1, three in quadrant 2, two in quadrant 3, and four in quadrant 4. It is imperative for Islamic banks that are in the low level of ‘social efficiency’ to develop a policy to keep in line with the five factors of maqashid sharia apart of maintaining efficiency in order to reach maslahah. For the regulators, the social efficiency measurement framework could be an alternative in considering Islamic bank performance beyond financial efficiency

A robust nonparametric approach to the analysis of scientific productivity

Data on scientific productivity at institutes of the French INSERM and at biomedical research institutes of the Italian CNR for 1997 were analysed. Available data on human capital input and geographical agglomeration allowed the estimation and comparison of efficiency measures for. Nonparametric envelopment techniques were used, and robust nonparametric techniques was applied in this work for the first time for evaluating scientific productivity. It is shown as a useful tool to compute scientific productivity indicators and make institutional comparative analyses. Taking into account a large number of methodological problems, a meaningful and rigorous indirect comparison is made possible. Several possible explanations of the observed differences in productivity are commented on