The Law of One Price in Data Envelopment Analysis: Restricting Weight Flexibility Across Firms

The Law of One Price (LoOP) states that all firms face the same prices for their inputs and outputs in the competitive market equilibrium. This law has powerful implications for productive efficiency analysis, which have remained unexploited thus far. This paper shows how LoOP-based weight restrictions can be incorporated in Data Envelopment Analysis (DEA). Utilizing the relation between the industry level and the firm level cost efficiency measures, we propose to apply a set of input prices that is common for all firms and that maximizes cost efficiency of the industry. Our framework allows for firm-specific output weights and variable returns-to-scale, and preserves the linear programming structure of the standard DEA. We apply the proposed methodology for evaluating research efficiency of economics departments of Dutch Universities. This application shows that the methodology is computationally tractable for practical efficiency analysis, and that it helps in deepening the DEA analysis.Data Envelopment Analysis; Law of One Price; industry-level efficiency; weight restrictions; research efficiency

Accounting for exogenous influences in a benevolent performance evaluation of teachers.

Students’ evaluations of teacher performance (SETs) are increasingly used by universities and colleges for teaching improvement and decision making (e.g., promotion or tenure). However, SETs are highly controversial mainly due to two issues: (1) teachers value various aspects of excellent teaching differently, and, to be fair, (2) SETs should be determined solely by the teacher’s actual performance in the classroom, not by other influences (related to the teacher, the students or the course) which are not under his or her control. To account for these two issues, this paper constructs SETs using a specially tailored version of the popular non-parametric Data Envelopment Analysis (DEA) approach. In particular, in a so-called ‘Benefit of the doubt’ model we account for different values and interpretations that teachers attach to ‘good teaching’. Within this model, we reduce the impact of measurement errors and a-typical observations, and account explicitly for heterogeneous background characteristics arising from teacher, student and course characteristics. To show the potentiality of the method, we examine teacher performance for the Hogeschool Universiteit Brussel (located in Belgium). Our findings suggest that heterogeneous background characteristics play an important role in teacher performance.Teacher performance; Data evelopment analysis; Conditional efficiency; Education;

Evaluation of performance of European cities with the aim of increasing quality of life

Tese de Doutoramento. Engenharia Industrial e Gestão. Faculdade de Engenharia. Universidade do Porto. 201

Accounting for exogenous influences in a benevolent performance evaluation of teachers

Students’ evaluations of teacher performance (SETs) are increasingly used by universities and colleges for teaching improvement and decision making (e.g., promotion or tenure). However, SETs are highly controversial mainly due to two issues: (1) teachers value various aspects of excellent teaching differently, and, to be fair, (2) SETs should be determined solely by the teacher’s actual performance in the classroom, not by other influences (related to the teacher, the students or the course) which are not under his or her control. To account for these two issues, this paper constructs SETs using a specially tailored version of the popular non-parametric Data Envelopment Analysis (DEA) approach. In particular, in a so-called ‘Benefit of the doubt’ model we account for different values and interpretations that teachers attach to ‘good teaching’. Within this model, we reduce the impact of measurement errors and a-typical observations, and account explicitly for heterogeneous background characteristics arising from teacher, student and course characteristics. To show the potentiality of the method, we examine teacher performance for the Hogeschool Universiteit Brussel (located in Belgium). Our findings suggest that heterogeneous background characteristics play an important role in teacher performance.Teacher performance, Data envelopment analysis, Conditional efficiency, Education.

Accounting for exogenous influences in a benevolent performance evaluation of teachers

Students’ evaluations of teacher performance (SETs) are increasingly used by universities and colleges for teaching improvement and decision making (e.g., promotion or tenure). However, SETs are highly controversial mainly due to two issues: (1) teachers value various aspects of excellent teaching differently, and, to be fair, (2) SETs should be determined solely by the teacher’s actual performance in the classroom, not by other influences (related to the teacher, the students or the course) which are not under his or her control. To account for these two issues, this paper constructs SETs using a specially tailored version of the popular non-parametric Data Envelopment Analysis (DEA) approach. In particular, in a so-called ‘Benefit of the doubt’ model we account for different values and interpretations that teachers attach to ‘good teaching’. Within this model, we reduce the impact of measurement errors and a-typical observations, and account explicitly for heterogeneous background characteristics arising from teacher, student and course characteristics. To show the potentiality of the method, we examine teacher performance for the Hogeschool Universiteit Brussel (located in Belgium). Our findings suggest that heterogeneous background characteristics play an important role in teacher performance.Teacher performance, Data envelopment analysis, Conditional efficiency, Education.

Creating composite indicators with DEA and robustness analysis: The case of the technology achievement index.

Composite indicators are regularly used for benchmarking countries’ performance, but equally often stir controversies about the unavoidable subjectivity that is connected with their construction. Data Envelopment Analysis helps to overcome some key limitations, viz., the undesirable dependence of final results from the preliminary normalization of sub-indicators, and, more cogently, from the subjective nature of the weights used for aggregating. Still, subjective decisions remain, and such modelling uncertainty propagates onto countries’ composite indicator values and relative rankings. Uncertainty and sensitivity analysis are therefore needed to assess robustness of final results and to analyze how much each individual source of uncertainty contributes to the output variance. The current paper reports on these issues, using the Technology Achievement Index as an illustration.Indexes; Indicators; Robustness; Technology;

Creating Composite Indicators with DEA and Robustness Analysis: the case of the Technology Achievement Index

Composite indicators are regularly used for benchmarking countries’ performance, but equally often stir controversies about the unavoidable subjectivity that is connected with their construction. Data Envelopment Analysis helps to overcome some key limitations, viz., the undesirable dependence of final results from the preliminary normalization of sub-indicators, and, more cogently, from the subjective nature of the weights used for aggregating. Still, subjective decisions remain, and such modelling uncertainty propagates onto countries’ composite indicator values and relative rankings. Uncertainty and sensitivity analysis are therefore needed to assess robustness of final results and to analyze how much each individual source of uncertainty contributes to the output variance. The current paper reports on these issues, using the Technology Achievement Index as an illustration.factor is more important in explaining the observed progress.composite indicators, aggregation, weighting, Internal Market

Benchmarking Sustainable Development: A Synthetic Meta-index Approach

The need for monitoring countries’ overall performance in Sustainable Development (SD) is widely recognized, but the methods for aggregating vast amounts of empirical data remain rather crude. This paper examines the so-called ‘benefit-of-the-doubt’ weighting method as a tool for identifying benchmarks without imposing strong normative judgement about SD priorities. The weighting method involves linear optimization techniques, and allows countries to emphasize and prioritize those SD aspects for which they perform relatively well. Using this method, we construct a meta-index of SD (MISD), which combines 14 existing aggregate SD indices (developed by well-established organizations and/or expert teams) into a single synthesizing overall SD index. Within a sample of 154 countries, our index identifies 6 benchmark countries (3 high-income countries and 3 upper-middle-income countries), but also a number of seriously under-performing countries. We view this approach as a first step towards more systematic international comparisons, aimed at facilitating diffusion of the best practices and policies from the benchmark countries to the less developed world.Sustainable Development, Integrated Assessment, Benchmarking, benefit of the doubt weighting, Data Envelopment Analysis

Hospital Efficiency: An Empirical Analysis of District and Grant-in-Aid Hospitals in Gujarat

This study focuses on analysing the hospital efficiency of district level government hospitals and grant-in-aid hospitals in Gujarat. The study makes an attempt to provide an overview of the general status of the health care services provided by hospitals in the state of Gujarat in terms of their technical and allocative efficiency. One of the two thrusts behind addressing the issue of efficiency was to take stock of the state of healthcare services (in terms of efficiency) provided by grant-in-aid hospitals and district hospitals in Gujarat. The motivation behind addressing the efficiency issue is to provide empirical analysis of governments policy to provide grants to not-for-profit making institutions which in turn provide hospital care in the state. The study addresses the issue whether grant-in-aid hospitals are relatively more efficient than public hospitals. This comparison between grant-in-aid hospitals and district hospitals in terms of their efficiency has been of interest to many researchers in countries other than India, and no consensus has been reached so far as to which category is more efficient. The relative efficiency of government and not-for-profit sector has been reviewed in this paper. It is expected that the findings of the study would be useful to evaluate this policy and help policy makers to develop benchmarks in providing the grants to such institutions.

An Evaluation of Cross-Efficiency Methods, Applied to Measuring Warehouse Performance

In this paper method and practice of cross-efficiency calculation is discussed. The main methods proposed in the literature are tested not on a set of artificial data but on a realistic sample of input-output data of European ware- houses. The empirical results show the limited role which increasing automation investment and larger warehouse size have in increasing productive performance. The reason is the existence of decreasing returns to scale in the industry, resulting in sub-optimal scales and inefficiencies, regardless of the operational performance of the facilities. From the methodological perspective, and based on a multidimensional metric which considers the capability of the various methods to rank warehouses, their ease of implementation, and their robustness to sensitivity analyses, we conclude to the superiority of the classic Sexton et al. (1986) method over recently proposed, more sophisticated methods