Integration of α-fairness with DEA based resource allocation model

Abstract

How to allocate a resource ef ciently and fairly attracts the attention of both researchers and practitioners. Data envelopment analysis (DEA) has been brought to bear on its solution. The existing literature applies Gini coef cient to measure the fairness in the resource allocation process. However, the Gini coef cient is inapplicable in many applications. This paper proposes a novel centralized resource allocation model based on DEA that considers both the ef ciency and the fairness. This paper adopts a notion of fairness, namely α-fairness that is well studied in welfare economics and is of practical signi cance. The new model integrates α-fairness with DEA to support resource allocation decisions. It aids decision makers in making a trade-off between the ef ciency and the fairness. An illustrative application is used to validate the proposed approach.