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Title:A note on imposing strong complementary in DEA PDF Logo
Authors:Krivonozhko, Vladimir
Førsund, Finn R.
Lychev, Andrey V.
Issue Date:2010
Series/Report no.:Memorandum // Department of Economics, University of Oslo 2010,17
Abstract:A new DEA model has been introduced recently combining the primal and the dual models in order to impose strong complementary slackness conditions. It was claimed that a reference set that contains the maximum number of efficient units can then be determined. The model is very interesting as a theoretical idea. However, not only does the computational burden increase significantly, but it seems also that the basic matrices may be inherently ill-conditioned, leading to wrong results. Numerical experiments have been carried out on two real datasets of medium size with 163 and 920 units. These experiments show pervasive existence of ill-conditioned matrices leading to obviously wrong estimates of efficiency scores, and units declared as efficient reference units while actually being inefficient.
Subjects:Data envelopment analysis
BCC model
DEA/SCSC model
strong complementary slackness conditions
JEL:C61
D20
Document Type:Working Paper
Appears in Collections:Memorandum, Department of Economics, University of Oslo

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