The weighted Russell measure of technical efficiency

John Ruggiero, Stuart Bretschneider

Research output: Contribution to journalArticlepeer-review

16 Scopus citations

Abstract

Theoretical consideration of technical efficiency has existed since Koopmans [10] defined it for production possibilities for which it is not possible to increase any output without simultaneously increasing any input, ceteris paribus. The nonparametric approach to efficiency measurement known as Data Envelopment Analysis is based on the index of Farrell [9], which measures radial reduction in all inputs consistent with observed output. Even after Farrell efficiency is achieved, however, there may exist additional slack in individual inputs, suggesting that the Farrell index does not necessarily measure Koopmans inefficiency. To solve this problem, the non-radial Russell measure was introduced. This paper shows that problems may arise with the Russell measure due to restrictive assumptions on the implicit weighting of inputs and outputs. This paper develops a new measure, the Weighted Russell measure, that relaxes this assumption. Using simulated data, the new measure is shown to be preferred to existing methods. In addition, the new method is applied to analyze the performance of New York State school districts.

Original languageEnglish (US)
Pages (from-to)438-451
Number of pages14
JournalEuropean Journal of Operational Research
Volume108
Issue number2
DOIs
StatePublished - Jul 16 1998
Externally publishedYes

Keywords

  • Data envelopment analysis
  • Efficiency
  • Excess slack

ASJC Scopus subject areas

  • Computer Science(all)
  • Modeling and Simulation
  • Management Science and Operations Research
  • Information Systems and Management

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