In productivity and efficiency analysis, the technical efficiency of a production unit is measured through its distance to the efficient frontier of the production set. The most familiar non-parametric methods use Farrell-Debreu, Shephard, or hyperbolic radial measures. These approaches require that inputs and outputs be non-negative, which can be problematic when using financial data. Recently...

We estimate Japanese banking inefficiency and the shadow price of problem loans by treating problem loans as a jointly produced undesirable by-product of the loan production process. Our method uses the directional output distance function of Färe et al. [R. Färe, S. Grosskopf, D.-W. Noh, W.L. Weber, Characteristics of a polluting technology: Theory and practice, Journal of Econometrics 126 (20...

Lovell and Rouse (LR) have recently proposed a modification of the standard DEA model that overcomes the infeasibility problem often encountered in computing super-efficiency. In the LR procedure one appropriately scales up the observed input vector (scale down the output vector) of the relevant superefficient firm thereby usually creating its inefficient surrogate. An alternative procedure pro...

In this paper, we aim to overcome three major shortcomings of the FDH (Free Disposal Hull) directional distance function through developing two new, named Linear and Fractional CDFDH, complete FDH measures of efficiency. To accomplish this, we integrate the concepts of similarity and FDH directional distance function. We prove that the proposed measures are translation invariant and unit invari...

For measuring technical efficiency relative to a log-linear technology, a generalized multiplicative directional distance function (GMDDF) is developed using the framework of multiplicative directional distance function (MDDF). Furthermore, a computational procedure is suggested for its estimation. The GMDDF serves as a comprehensive measure of efficiency in revealing Pareto-efficient targets a...

A class of uni-directional Cayley graphs based on alternating groups is proposed in this paper. It is shown that this class of graphs is strongly connected and recursively scalable. The analysis of the shortest distance between any pair of nodes in a graph of this class is also given. Based on the analysis, we develop a polynomial time routing algorithm which yields a path distance at most one ...

This paper extends two directional distance function models, the Multi-directional Efficiency Analysis (MEA) Model and the Range Directional Model (RDM), in order to account for any type of technical inefficiency, i.e. both directional and non-directional inefficiencies. We first focus on the variable returns to scale (VRS) case, because both VRS-MEA and RDM are translation invariant models, wh...