Impact of input substitution and output transformation on data envelopment analysis decisions

Barnum, Darold T.; Coupet, Jason; Gleason, John M.; McWilliams, Abagail; Parhankangas, Annaleena

doi:10.1080/00036846.2016.1221042

Cited by 17 publications

(15 citation statements)

References 41 publications

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“…For example, if an affiliate does not construct many new houses but has rehabilitated several, DEA will heavily weight its output of rehabilitated homes relative to other outputs. DEA weights can be manually programmed as fixed if inputs and outputs are constrained in some meaningful way (Barnum, Coupet, Gleason, McWilliams, & Parhankangas, ). In this study, we allow weights to proceed unconstrained to maximize the efficiency of each affiliate, and such that no affiliate is penalized for emphasizing one output over the other.…”

Section: Methodsmentioning

confidence: 99%

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Toward a valid approach to nonprofit efficiency measurement

Coupet

Berrett

2018

Nonprofit Mgmnt & Ldrshp

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Past literature in nonprofit management uses the overhead ratio of nonprofits as a measure of efficiency. Although the overhead ratio might measure top-heaviness, we argue that it does not measure nonprofit efficiency. To investigate this, we use financial and operational data to rank the efficiency of Habitat for Humanity affiliates with the overhead and administrative ratio, as well as data envelopment analysis (DEA) and stochastic frontier analysis (SFA), two of the most popular efficiency measures. While the DEA and SFA rankings are statistically correlated, overhead ratio rankings are negatively correlated with both SFA and DEA rankings. We argue that nonprofit scholars, managers, and donors should move away from concepts and measures of efficiency based on financial ratios, and toward ones that embrace maximizing what nonprofits are able to make and do.

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Section: Methodsmentioning

confidence: 99%

“…The inputs and outputs used are presented in Table . Inputs and outputs selection is critical in DEA: Increasing input should empirically or theoretically increase each output (Barnum et al, ). To ensure the selected inputs and outputs were appropriate, we regressed each output on each input used and found them statistically significant.…”

Section: Methodsmentioning

confidence: 99%

Toward a valid approach to nonprofit efficiency measurement

Coupet

Berrett

2018

Nonprofit Mgmnt & Ldrshp

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“…An in-depth literature review on efficiency techniques in education is available in De Witte & López-Torres (2017). 6 We are grateful to an anonymous referee for valuable suggestions on the matter of output transformations (Barnum, Coupet, Gleason, McWilliams, & Parhankangas, 2017). In the evaluation of school districts, we can reasonably assume that a decrease in effectiveness for one district function can be offset by a higher effectiveness for another function.…”

Section: 'Benefit-of-the-doubt' (Bod)mentioning

confidence: 99%

Measuring and explaining organizational effectiveness of school districts: Evidence from a robust and conditional Benefit-of-the-Doubt approach

Witte

Schiltz

2018

European Journal of Operational Research

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“…Thus, the DEA method is also an option. As Barnum et al (2017) explained, there are some methodological hazards associated with the use of DEA that are especially relevant to managerial decisions, but which are largely ignored in the literature, especially the problem of economic assumptions regarding input substitutions and output transformations.…”

Section: Key Factors Of Competitiveness At the Eu National Levelmentioning

confidence: 99%

Nonparametric Approach to Evaluation of Economic and Social Development in the EU28 Member States by DEA Efficiency

Melecký

Staníčková

Hančlová

2019

JRFM

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Data envelopment analysis (DEA) methodology is used in this study for a comparison of the dynamic efficiency of European countries over the last decade. Moreover, efficiency analysis is used to determine where resources are distributed efficiently and/or were used efficiently/inefficiently under factors of competitiveness extracted from factor analysis. DEA measures numerical grades of the efficiency of economic processes within evaluated countries and, therefore, it becomes a suitable tool for setting an efficient/inefficient position of each country. Most importantly, the DEA technique is applied to all (28) European Union (EU) countries to evaluate their technical and technological efficiency within the selected factors of competitiveness based on country competitiveness index in the 2000–2017 reference period. The main aim of the paper is to measure efficiency changes over the reference period and to analyze the level of productivity in individual countries based on the Malmquist productivity index (MPI). Empirical results confirm significant disparities among European countries and selected periods 2000–2007, 2008–2011, and 2012–2017. Finally, the study offers a comprehensive comparison and discussion of results obtained by MPI that indicate the EU countries in which policy-making authorities should aim to stimulate national development and provide more quality of life to the EU citizens.

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Impact of input substitution and output transformation on data envelopment analysis decisions

Cited by 17 publications

References 41 publications

Toward a valid approach to nonprofit efficiency measurement

Toward a valid approach to nonprofit efficiency measurement

Measuring and explaining organizational effectiveness of school districts: Evidence from a robust and conditional Benefit-of-the-Doubt approach

Nonparametric Approach to Evaluation of Economic and Social Development in the EU28 Member States by DEA Efficiency

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