Context-Dependent Data Envelopment Analysis and its Use

Efficiency and productivity change in the Greek dairy industry.

Abstract: The objective of this paper is to measure the efficiency and the productivity change of Greek dairy firms, using non parametric approaches. This assessment is being achieved by the computation of the CRS and the VRS DEA models, the context dependent DEA approach and finally, the evolution of the Malmquist productivity index. These empirical analyses are based on data from 29 Greek dairy firms. This implementation provided helpful information regarding the efficiency ranking of the firms that operate in the Greek dairy industry. Findings that inefficient firms are over-invested and over-exposed to high risk operation practices provide suggestions for future reparative actions in order to improve efficiency. This goal does not require radial effort from firms to achieve intermediate targets. Finally, stagnated mean efficiency change does not imply stagnated efficiency change for individual firms, but it is the outcome of a large variance of efficiency change scores being achieved by dairy firms from period to period.Keywords: Efficiency, Context-depended DEA, Malmquist Productivity Index, Dairy Industry(ProQuest: ... denotes formulae omitted.)1. IntroductionThe dairy market situation deteriorated dramatically during the 2007-2009 period. In 2007 European Union (EU) and world dairy market prices increased considerably leading to a relatively small increase in milk deliveries. However, in 2008, a drop in global demand connected with the economic crisis had a direct effect on EU market prices which dropped substantially affecting severely dairy producers' income. The market situation recovered in 2009 and continuously improved in 2010 (European Commission, 2010). According to the second "soft landing" report from the EC (2012), volatility, not to the extent observed during the 2008-2009 period, persisted in the dairy market until the end of 2010 and it receded in 2011 and 2012, leading to increased production and higher prices.In general, the milk sector went through a period of turmoil, but since then the dairy market situation has improved and future prospects are broadly positive, although the market has not been stabilized. Increasing global demand, especially from emerging countries, such as India, China and Russia, and growing trade create new perspectives for the sector. In order to benefit from the opportunities offered by demand and trade growth, to stabilize the dairy market and to ensure a fair functioning of the dairy supply chain a strong and efficient dairy industry is required. Robust milk processing factories and retailers would mitigate the price fluctuations, alleviate the market situation and assist to the restructuring of the sector. An efficient and effective operation of the dairy industry is essential to raise the competitiveness of the dairy sector. In this context, the investigation of the economic performance and the efficiency of dairy firms would be beneficial for an insightful critical description of the dairy sector in total.The purpose of this paper is to assess the efficiency and the productivity growth of the dairy industry in Greece. The technical efficiency level of 29 dairy firms is measured through the application of a context-dependent Data Envelopment Analysis (DEA) approach, while the total factor productivity change and its components is estimated using the Malmquist productivity index. The analysis is based on published data and provides an indicative picture of the performance, structure and productivity of the dairy industry in the country.Dairy industry in Greece constitutes one of the most important and dynamic sectors of the country's economy and a traditional branch of the Greek food industry (Rezitis and Kalantzi, 2012), exhibiting significant development the last thirty years. The vast majority of the companies that operate in the industry are small, local, family diaries that produce various types of dairy products, indicating a rather fragmented industry (Feka et al. …

The Efficiency of R&D Expenditures in ASEAN Countries

Abstract: The aim of this study is to determine whether funds spent on research and development are used efficiently in Association of Southeast Asian Nations (ASEAN) countries. Fifteen countries in the 2000-2016 period have been examined. Measuring the efficiency of research and development spending was performed using the non-parametric Data Envelopment Analysis (DEA) methodology, which allows for the assessment of input–output efficiency. The research includes the following input and output variables: annual public and private spending on innovation, high-technology exports as a percentage of manufactured exports, patent applications to the World Intellectual Property Organisation (WIPO) by priority year for million inhabitants, trademark applications (TA) for million inhabitants and information and communications technology (ICT) exports as a percentage of manufactured exports. Hong Kong and the Philippines are perhaps the most efficient with respect to research and development (R&D) when analysed using the constant return to scale (CRS) approach. However, according to the variable return to scale (VRS) approach, the most efficient ASEAN countries are Hong Kong, Indonesia, Singapore and the Philippines. The study also confirms that increased spending on innovation is resulting in non-proportional effects.

Impact of the industry on franchise chain efficiency: a meta-DEA and context-dependent DEA approach

Abstract: A meta-DEA (Data Envelopment Analysis) approach is used to analyse the impact of the industry in which the franchisor operates its business on its chain efficiency by comparing chain efficiency between and across industries (retail versus services). To provide realistic short-term and long-term objectives to inefficient chains, a level-by-level benchmarking path is developed with the context-dependent DEA approach. Furthermore, the joint implementation of both approaches enables an identification of chains for which the industry influences their efficiency, an evaluation of the efficiency share that results from industry-specific factors rather than factors common to the franchise sector as a whole, and the characterization of an implementable and achievable benchmarking defining level-by-level improvements of chain efficiency and taking into account chain characteristics. Such an analysis can help franchisors to define their future strategic and managerial orientations.

Wine business performance benchmarking: a comparison of German and Ukrainian wineries

Abstract: Purpose The purpose of this paper is to evaluate and compare the efficiency of wine making in Germany and Ukraine in order to find the controllable factors of wine business performance using benchmarking tools. Design/methodology/approach The models of data envelopment analysis and other benchmarking tools are used to analyse the efficiency of wineries in two countries. Returns to scale, scale efficiency, super-efficiency and some other indicators are examined. The research is based on the sample of 36 German and Ukrainian wineries. Findings The hypothesis of higher wine making relative efficiency in Germany was compared with Ukrainian wine making, then analytically and statistically verified. A relatively high average scale efficiency score indicates good potential (above 30 per cent) for efficiency growth, due to the optimisation of a scale of production and sales. Generally, wine making in Germany and Ukraine has increasing returns to scale. The high-efficient wine business cannot bring great losses. It was found that the most efficient combinations of size and legal form of business organisation for wine business are presented in Germany. Research limitations/implications The research is limited by a single industry of only the two countries. Practical implications This study provides useful information for researchers, investors and policy makers, enabling them to understand the current state, basic problems, controllable factors and efficiency levels of wine making in Germany and Ukraine. It may be useful to wine producers in these countries for improving their business performance. Originality/value This is the first paper that compares wine business performance and discloses its factors for Germany and Ukraine.

Exploring the factors of efficiency in German and Ukrainian wineries

Abstract: The paper is devoted to the evaluation and comparison of the efficiency of winemaking in Germany and Ukraine in order to find the key factors of efficiency of wine business in these countries. The models of data envelopment analysis (DEA), correlation and other tools of data analysis are used to analyse the efficiency of wineries in two countries. Returns to scale, scale efficiency, super-efficiency and some other indicators are examined. The study is based on the sample including 36 wineries of Germany and Ukraine. The hypothesis about a higher relative efficiency of winemaking in Germany in comparison with Ukrainian winemaking was confirmed analytically. Relatively a high average scale efficiency score indicates a good potential (above 30%) for efficiency growth due to the optimization of a scale of production and sales. Generally, winemaking in Germany and Ukraine has increasing returns to scale. It was found to be the most efficient combination of the size and legal form of business organization for wine business in Germany.

Measuring the efficiency of decision making units

Abstract: A nonlinear (nonconvex) programming model provides a new definition of efficiency for use in evaluating activities of not-for-profit entities participating in public programs. A scalar measure of the efficiency of each participating unit is thereby provided, along with methods for objectively determining weights by reference to the observational data for the multiple outputs and multiple inputs that characterize such programs. Equivalences are established to ordinary linear programming models for effecting computations. The duals to these linear programming models provide a new way for estimating extremal relations from observational data. Connections between engineering and economic approaches to efficiency are delineated along with new interpretations and ways of using them in evaluating and controlling managerial behavior in public programs.

A procedure for ranking efficient units in data envelopment analysis

Abstract: Data Envelopment Analysis DEA evaluates the relative efficiency of decision-making units DMUs but does not allow for a ranking of the efficient units themselves. A modified version of DEA based upon comparison of efficient DMUs relative to a reference technology spanned by all other units is developed. The procedure provides a framework for ranking efficient units and facilitates comparison with rankings based on parametric methods.

A slacks-based measure of super-efficiency in data envelopment analysis

Abstract: In most models of Data Envelopment Analysis (DEA), the best performers have the full efficient status denoted by unity (or 100%), and, from experience, we know that usually plural Decision Making Units (DMUs) have this “efficient status”. To discriminate between these efficient DMUs is an interesting subject. This paper addresses this “super-efficiency” issue by using the slacks-based measure (SBM) of efficiency, which the author proposed in his previous paper [European Journal of Operational Research 130 (2001) 498]. The method differs from the traditional one based on the radial measure, e.g. Andersen and Petersen model, in that the former deals directly with slacks in inputs/outputs, while the latter does not take account of the existence of slacks. We will demonstrate the rationality of our approach by comparing it with the radial measure of super-efficiency. The proposed method will be particularly useful when the number of DMUs are small compared with the number of criteria employed for evaluation.

A Slacks-based Measure of Super-Efficiency in Data Envelopment Analysis

Abstract: In most models of Data Envelopment Analysis (DEA), the best performers have the full efficient status denoted by unity (or 100%), and, from experience, we know that usually plural Decision Making Units (DMUs) have this “efficient status”. To discriminate between these efficient DMUs is an interesting subject. This paper addresses this “super-efficiency” issue by using the slacks-based measure (SBM) of efficiency, which the author proposed in his previous paper [European Journal of Operational Research 130 (2001) 498]. The method differs from the traditional one based on the radial measure, e.g. Andersen and Petersen model, in that the former deals directly with slacks in inputs/outputs, while the latter does not take account of the existence of slacks. We will demonstrate the rationality of our approach by comparing it with the radial measure of super-efficiency. The proposed method will be particularly useful when the number of DMUs are small compared with the number of criteria employed for evaluation.

Context-dependent preferences

Abstract: The standard theory of choice—based on value maximization—associates with each option a real value such that, given an offered set, the decision maker chooses the option with the highest value. Despite its simplicity and intuitive appeal, there is a growing body of data that is inconsistent with this theory. In particular, the relative attractiveness of x compared to y often depends on the presence or absence of a third option z, and the “market share” of an option can actually be increased by enlarging the offered set. We review recent empirical findings that are inconsistent with value maximization, and present a context-dependent model that expresses the value of each option as an additive combination of two components: a contingent weighting process that captures the effect of the background context, and a binary comparison process that describes the effect of the local context. The model accounts for observed violations of the standard theory and provides a framework for analyzing context-dependent p...