Decision Sciences
6 years ago
New method reveals hidden economic inefficiencies in decision-making units.
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Paper Summary
A new method was developed to measure economic inefficiency in decision making units by calculating the least distance to the efficient frontier in Data Envelopment Analysis. Unlike previous approaches focusing only on technical inefficiency, this method can be applied when market prices, inputs, and outputs are known. The study used data on mandarins' production in a Spanish province to demonstrate the effectiveness of the new approach.