Wissenschaftliche Vorträge

Peer Selection in DEA – Efficiency vs. RTS
Dellnitz, A.
Reucher, E.
Wissenschaftliche Vorträge
Data Envelopment Analysis
International Conference on DEA, 23. - 26. Mai 2016, Wuhan, China.

Data envelopment analysis (DEA) is a well-known method for measuring the
efficiency amongst a group of decision making units (DMUs). But especially the
BCC-model – named by their creators Banker, Charnes, Cooper (1984) – often
will be applied to get more information about a DMU's economic position in
DEA; thus one can easily obtain the DMU's Returns to Scale (RTS). This
information enables the DMU to decide whether its economic activity should be
up- or downsized for gaining scale-efficiency rather than improving technical

The purpose of a peer-based DEA is to find a peer – one price system that acts
as a common efficiency- and RTS-denominator for all DMUs. The peer price
system then might be used for further activity planning. In most applications
the price system with the least efficiency deviation for all DMUs is the preferred
one. Efficiency is only one economic measure, RTS is the other.
In this talk we show that efficiencies and returns to scale are both appropriate
indices to select a peer. However, in some cases these objectives may collide
and hence we get different peers. Therefore, we present a multi-criteria
optimization problem to combine both potentially conflicting criteria.

Keywords: BCC-efficiency -- returns to scale -- consensual peer -- multi-objective optimization