A parameter-free approach for estimating the quality and quantity of the right and left returns to scale in Data Envelopment Analysis

•This paper studies the estimation of the right and left returns to scale.•The new method detects both the type and the value of returns to scale.•The advantage of the new method is that it uses no parameter in model formulation.•A case study in banking system validates the new method. One of the co...

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Veröffentlicht in:Expert systems with applications Jg. 125; S. 170 - 180
Hauptverfasser: Mirbolouki, Mahnaz, Allahyar, Maryam
Format: Journal Article
Sprache:Englisch
Veröffentlicht: New York Elsevier Ltd 01.07.2019
Elsevier BV
Schlagworte:
Data analysis
Data Envelopment Analysis
Efficiency
Mathematical models
Mixed Binary Integer Programming
Operations research
Parameter estimation
Parameter sensitivity
Right and left returns to scale
Scientific papers
Right and left returns to scale
Mixed Binary Integer Programming
Efficiency
Data Envelopment Analysis
ISSN:0957-4174, 1873-6793
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Zusammenfassung:•This paper studies the estimation of the right and left returns to scale.•The new method detects both the type and the value of returns to scale.•The advantage of the new method is that it uses no parameter in model formulation.•A case study in banking system validates the new method. One of the concepts that has gained important attention from economic and management-science research is that of the concept of returns to scale (RTS). There are several research papers on the behavior of the right and left RTS, as two specific directions of RTS, based on Data Envelopment Analysis (DEA) models. However, the main weakness of most of these methods is that they are based on the defined parameters, which itself leads to a high sensitivity of the models to variations in the magnitudes of the parameters and, thus, unreliable results. In this paper, we specially address this issue and propose a simple procedure for detecting the right and left RTS classification with an important feature that is independent of any predetermined parameters. In addition to the type of RTS, we also suggest a method to determine the value of the right and left RTS corresponding to each of the efficient DMUs. Finally, the superiority of the proposed parameter-free procedure over a parameter-based methods is elaborated by a real case in the banking system.
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ISSN:0957-4174
1873-6793
DOI:10.1016/j.eswa.2019.01.065