Technical efficiency bias caused by intra-input aggregation in data envelopment analysis

Abstract

The study shows that technical efficiency scores in Data Envelopment Analysis are biased by linear aggregation of the quantities of the same type of input that are used by all outputs (intra-input aggregation). Färe et al. 's (2004) models are expanded to account for this additional bias, and the extent of its impact on reported technical efficiency scores is commented on.