Resolving the deposit dilemma: A new DEA bank efficiency model.
TL;DR: The authors proposed an alternative Data Envelopment Analysis (DEA) bank efficiency model that treats deposits as an intermediate product, thus emphasizing the dual role of deposits in the bank production process.
Abstract: One of the weaknesses of current bank efficiency models is a disagreement as to the role of deposits in the bank production process. Some models view deposits as an input, while others view them as an output. Such disparity of approaches results in inconsistent efficiency estimates. In this study we propose an alternative Data Envelopment Analysis (DEA) bank efficiency model that treats deposits as an intermediate product, thus emphasizing the dual role of deposits in the bank production process. Consequently, the effect of the amount of deposits on bank efficiency depends on the efficiency at both stages of the bank production process. The main advantage of our model is that it does not require a researcher to make a judgment call as to whether having more (production approach) or less (intermediation approach) deposits is “better” for bank efficiency. Our unified framework has the potential to produce more consistent efficiency estimates.
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TL;DR: This paper reviews studies on network DEA by examining the models used and the structures of the network system of the problem being studied, and highlights some directions for future studies from the methodological point of view.
446 citations
TL;DR: A bank network revenue function is constructed as the difference between total revenue and the reserves for possible loan losses to incorporate the roles played by non-performing loans in bank production and applies Nerlove's revenue inefficiency model.
163 citations
TL;DR: New Fuzzy-DEA α-level models to assess underlying uncertainty are proposed and price of labor, price of capital, and market-share were found to be the significant factors in measuring bank efficiency.
135 citations
TL;DR: This study proposes a three-stage DEA model with two independent parallel stages linking to a third final stage and calculates the efficiency of this model by considering a series of intermediate measures and constraints.
98 citations
TL;DR: In this paper, the authors present a survey and classification of two-stage DEA models and point out the significance of these models for the decision maker of a supply chain, and present some concluding remarks and a number of policy implications and opportunities for decision maker.
90 citations
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TL;DR: 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 and methods for objectively determining weights by reference to the observational data for the multiple outputs and multiple inputs that characterize such programs.
25,433 citations
Book•
30 Nov 1999TL;DR: In this article, the basic CCR model and DEA models with restricted multipliers are discussed. But they do not consider the effect of non-discretionary and categorical variables.
Abstract: List of Tables. List of Figures. Preface. 1. General Discussion. 2. The Basic CCR Model. 3. The CCR Model and Production Correspondence. 4. Alternative DEA Models. 5. Returns to Scale. 6. Models with Restricted Multipliers. 7. Discretionary, Non-Discretionary and Categorical Variables. 8. Allocation Models. 9. Data Variations. Appendices. Index.
4,395 citations
TL;DR: The authors survey 130 studies that apply frontier efficiency analysis to financial institutions in 21 countries and find that the various efficiency methods do not necessarily yield consistent results and suggest some ways that these methods might be improved to bring about findings that are more consistent, accurate, and useful.
2,983 citations
TL;DR: This article examined several possible sources, including differences in efficiency concept, measurement method, and a number of bank, market, and regulatory characteristics, and provided new evidence using data on US banks over the period 1990-1995.
Abstract: Over the past several years, substantial research effort has gone into measuring the efficiency of financial institutions. Many studies have found that inefficiencies are quite large, on the order of 20% or more of total banking industry costs and about half of the industry's potential profits. There is no consensus on the sources of the differences in measured efficiency. this paper examines several possible sources, including differences in efficiency concept, measurement method, and a number of bank, market, and regulatory characteristics. We review the existing literature and provide new evidence using data on US banks over the period 1990–1995.
1,976 citations