Fai Keung Tam

This research presents a couple of important theoretical developments to the field of Data Envelopment Analysis (DEA). The original models developed by Charnes, Cooper and Rhodes [CHAR78], and Banker, Charnes and Cooper [BANK84b] were both radial models. These models, and their varied extensions have remained the most popular DEA models in terms of utilization. Radial models presented in the DEA literature employ either and input- or output-orientation. Furthermore, the benchmark targets they determined for inefficient units were mostly based on the notion of maintaining the same input and output mixes originally employed by the evaluated unit. New DEA models were formulated here to extend the capabilities of DEA in both of these areas. The omni-oriented radial DEA simultaneously considers both input reduction and output expansion, and provides a single efficiency measure based on both of these goals. A methodology was also developed to estimate allocation and overall efficiency in the absence of defined input and output prices. The benchmarks determined from models based on this methodology will consider all possible input mixes, output mixes, or both. Both of these developments were illustrated on a model of the financial intermediary function of a bank branch network.

The Examination of Allocative and Overall Efficiencies in DEA Using Shadow Prices, and the Introduction of an Omni-oriented Radial DEA Model [microform]

Joseph C. Paradi

H. David Sherman

This book presents the methodology and applications of Data Envelopment Analysis (DEA) in measuring productivity, efficiency and effectiveness in Financial Services firms such as banks, bank branches, stock markets, pension funds, mutual funds, insurance firms, credit unions, risk tolerance, and corporate failure prediction. Financial service DEA research includes banking; insurance businesses; hedge, pension and mutual funds; and credit unions. Significant business transactions among financial service organizations such as bank mergers and acquisitions and valuation of IPOs have also been the focus of DEA research. The book looks at the range of DEA uses for financial services by presenting prior studies, examining the current capabilities reflected in the most recent research, and projecting future new uses of DEA in finance related applications.

Fai Keung Tam

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