publication . Article . Other literature type . 1986

The Use of Categorical Variables in Data Envelopment Analysis

Banker, Rajiv D.; Morey, Richard C.;
Open Access
  • Published: 01 Dec 1986 Journal: Management Science, volume 32, issue 12 December, pages 1,613-1,627
Data Envelopment Analysis has now been extensively applied in a range of empirical settings to identify relative inefficiencies, and provide targets for improvements. It accomplishes this by developing peer groups for each unit being operated. The use of categorical variables is an important extension which can improve the peer group construction process and incorporate "on-off" characteristics, e.g., presence of drive-in window or not in a banking network. It relaxes the stringent need for factors to display piecewise constant marginal productivities. In so doing, it substantially strengthens the credibility of the insights obtained. The paper treats the cases ...
free text keywords: Management Science and Operations Research, Strategy and Management, Decision theory, Peer group, Categorical variable, Economics, Data envelopment analysis, Inefficiency, Operations research, Credibility, Piecewise
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