Value efficiency analysis: Some theory

Abstract

Basic data envelopment analysis models are intrinsically preference-free. One of the basic assumptions in applying the DEA technique is that no input-output item is more important than another, and also no decision making unit is preferred to another. However, in some cases there is a Decision Maker who has some preferences over inputs and outputs or among the decision making units, based on his/her experiences. Therefore, it is desirable to take into account such information in the process of evaluating units. In this study, we investigate the concept of value efficiency analysis and some basic properties are established.