Feb 1, 2010 Report No：09-21
An epsilon-based measure of efficiency in DEA revisited -A third pole of technical efficiency-
- Tone KaoruGRIPS
- Miki TsutsuiCentral Research Institute of Electric Power Industry
In DEA, we have two measures of technical efficiency with different characteristics: radial and non-radial. In this paper we compile them into a composite model called “epsilon-based measure (EBM).”
For this purpose we introduce two parameters which connect radial and non-radial models.
These two parameters are obtained from the newly defined affinity index between inputs or outputs along with principal component analysis on the affinity matrix. Thus, EBM takes into account diversity of input/output data and their relative importance for measuring technical efficiency.
||Data envelopment analysis, Radial, Non-radial, CCR, SBM, EBM, Principal component analysis