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Sensitivity Analysis of BCC Efficiency in DEA with Application to European Health Services

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Operations Research Proceedings 2013

Part of the book series: Operations Research Proceedings ((ORP))

Abstract

The CCR model by Charnes et al. [4] on the one hand and BCC model by Banker et al. [3] on the other hand are the most common used approaches of data envelopment analysis (DEA). If we measure efficiency of decision making units (DMUs) by the BCC model, technology is characterized by variable returns to scale. If the inputs and outputs of a DMU are scaled by two parameters such that the BCC (in)efficiency score is unchanged we call this adaptation a bicentric scaling (BS). We introduce a linear program to calculate the BS stability region of all DMUs, efficient or inefficient. Moreover we determine the scale efficiency within the stability region. The new approach is illustrated by a numerical example of European health services. We demonstrate the BS stability region for various states and illustrate consequences on scale efficiency. It is shown that some states can improve scale efficiency without losing BCC efficiency.

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Authors and Affiliations

  1. Fern Universität Hagen, 58084, Hagen, Germany

    Andreas Kleine, Andreas Dellnitz & Wilhelm Rödder

Authors
  1. Andreas Kleine
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  2. Andreas Dellnitz
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  3. Wilhelm Rödder
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Corresponding author

Correspondence to Andreas Kleine .

Editor information

Editors and Affiliations

  1. Econometric Institute, Erasmus School of Economics, Erasmus University Rotterdam, Rotterdam, The Netherlands

    Dennis Huisman

  2. Erasmus School of Economics, Erasmus University Rotterdam, Rotterdam, The Netherlands

    Ilse Louwerse

  3. Erasmus School of Economics, Erasmus University Rotterdam, Rotterdam, The Netherlands

    Albert P.M. Wagelmans

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Kleine, A., Dellnitz, A., Rödder, W. (2014). Sensitivity Analysis of BCC Efficiency in DEA with Application to European Health Services. In: Huisman, D., Louwerse, I., Wagelmans, A. (eds) Operations Research Proceedings 2013. Operations Research Proceedings. Springer, Cham. https://doi.org/10.1007/978-3-319-07001-8_33

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