DYNAMIC NETWORK RANGE-ADJUSTED MEASURE VS. DYNAMIC NETWORK SLACKS-BASED MEASURE

Abstract

We dedicate this paper to the memory of Professor William W. Cooper, 1914–2012, whose generous demeanor touched and inspired at least three generations of DEA researchers. It is up to the DEA community to make sure that his vision and legacy live on. Abstract We formulate weighted, dynamic network range-adjusted measure (DN-RAM) and dynamic network slacks-based measure (DN-SBM), run robustness tests and compare results. To the best of our knowledge, the current paper is the first to compare two weighted dynamic network DEA models and it also represents the first attempt at formulating DN-RAM. We illustrate our models using simulated data on residential aged care. Insight gained by running DN-RAM in parallel with DN-SBM includes (a) identical benchmark groups, (b) a substantially wider range of efficiency estimates under DN-RAM, and (c) evidence of inefficient size bias. DN-RAM is also shown to have the additional desirable technical efficiency properties of translation-invariance and acceptance of free data. Managerial implications are also briefly discussed