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Input-oriented constant returns to scale DEA (CRS): minθ,λθ, subject to
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Input-oriented variable returns to scale DEA (VRS): minθ,λθ, subject to
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Input-oriented non-increasing returns to scale DEA (NIRS): minθ,λθ, subject to
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− qi + Qλ ≥ 0
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− qi + Qλ ≥ 0
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− qi + Qλ ≥ 0
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θ xi − Xλ ≥ 0
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θ xi − Xλ ≥ 0
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θ xi − Xλ ≥ 0
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λ ≥ 0
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N1 ’ λ = 1
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N1 ’ λ ≤ 1
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λ ≥ 0
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λ ≥ 0
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- Where θ is the total technical efficiency score of the ith firm and λ is a Nx1 vector of constants. The value of θ must satisfy the restriction: 0 ≤ θ ≤ 1. If θ = 1; it indicates that the firm is on the production frontier and is technically efficient. When θ ≤ 1, the firm is technically inefficient.
- In the VRS DEA model, N1’λ = 1 is added to show a convexity constraint which ensures that an inefficient firm is only benchmarked against firms of a similar size. On the other hand, in the NIRS DEA model, N1’λ = 1 is replaced by N1’λ ≤ 1 to ensure that the ith firm is not “benchmarked” against firms that are substantially larger than it, but may be compared with firms smaller than it.
- Source: Summarized from Coelli et al. (1998).
