Theoretical perspectives of trade-off analysis using DEA

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Because of the piecewise linear nature of the frontier in data envelopment analysis (DEA), estimated marginal rates of substitution are only valid for infinitesimal, or small finite, changes in one or more variables. Analysing the impacts of very small changes is not adequate for many situations, where the consequences of substantial changes in variables are of interest to for instance managers. This paper develops methods for evaluating larger, i.e. non-marginal, tradeoffs between variables in DEA. The methods are capable of handling both scalar and additive changes. Finally, the approaches for evaluating basic pairwise tradeoffs are generalised in order to enable assessment of the impact on one or more throughputs of the change in one or more of the other throughputs.

Original languageEnglish
JournalOmega
Volume34
Issue number4
Pages (from-to)337-343
Number of pages7
ISSN0305-0483
DOIs
Publication statusPublished - 2006
Externally publishedYes

    Research areas

  • Data envelopment analysis (DEA), Marginal, Non-marginal, Rates of substitution, Trade-off

ID: 227788060