Quadratic data envelopment analysis

T. Kuosmanen, T. Post

Research output: Contribution to journalArticle

2 Citations (Scopus)

Abstract

Data Envelopment Analysis (DEA) offers a piece-wise linear approximation of the production frontier. The approximation tends to be poor if the true frontier is not concave, eg in case of economies of scale or of specialisation. To improve the flexibility of the DEA frontier and to gain in empirical fit, we propose to extend DEA towards a more general piece-wise quadratic approximation, called Quadratic Data Envelopment Analysis (QDEA). We show that QDEA gives statistically consistent estimates for all production frontiers with bounded Hessian eigenvalues. Our Monte-Carlo simulations suggest that QDEA can substantially improve efficiency estimation in finite samples relative to standard DEA models.

Original languageEnglish
Pages (from-to)1204-1214
Number of pages11
JournalJournal of the Operational Research Society
Volume53
Issue number11
DOIs
Publication statusPublished - Nov 2002

Keywords

  • Data envelopment analysis (DEA)
  • Efficiency measurement
  • Piece-wise quadratic approximation

ASJC Scopus subject areas

  • Management Information Systems
  • Strategy and Management
  • Management Science and Operations Research
  • Marketing

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