Mixing DEA and FDH models together

Abstract

New formulations of data envelopment analysis (DEA) and free disposal hull (FDH) models in a unified linear framework are proposed. One of the main objectives of this paper is to derive meaningful economic interpretations of the dual models in the price space. In particular, we introduce a new formulation of the returns to scale assumption with a straightforward economic interpretation. This framework allows for mixing DEA and FDH models together in a more general framework.

Keywords:

• data envelopment analysis
• free disposal hull
• directional distance function
• returns to scale
• linear programming