An alternative metafrontier framework for measuring the heterogeneity of technology

Qunwei Wang, Ye Hang, Jin-Li Hu, Ching Ren Chiu*

*Corresponding author for this work

Research output: Contribution to journalArticlepeer-review

16 Scopus citations

Abstract

The metafrontier framework proposed by O'Donnell et al. enables the evaluation of relative efficiencies for decision-making units (DMUs) operating under heterogeneous technologies. The metatechnology ratio (MTR) constructed under the metafrontier framework helps estimate the gap between group frontiers and the metafrontier, with its score between 0 and 1. However, an unreasonable MTR value (ie, greater than 1) may appear when the traditional metafrontier framework is applied in the nonradial data envelopment analysis (DEA) models. This article proposes an alternative metafrontier framework for addressing this issue. The newly constructed technology gap measurement (TGM) can avoid unreasonable technology gap ratio values in nonradial DEA models and substitute for MTR in radial DEA models. To demonstrate how this alternative metafrontier approach works, this article applies it to the efficiency evaluation of regional transportation sectors in China.

Original languageEnglish
Pages (from-to)427-445
Number of pages19
JournalNaval Research Logistics
Volume65
Issue number5
DOIs
StatePublished - 1 Aug 2018

Keywords

  • DEA
  • nonradial DDF
  • range adjusted measure
  • slack-based measure
  • technology gap

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