Differential Characteristics of Efficient Frontiers in DEA with Weight Restrictions

Abstract

The non-differentiability and implicit definition of boundary of production possibility set (PPS) in data envelopment analysis (DEA) are two important difficulties for obtaining directional characteristics, including different elasticity measures and marginal rates of substitution. Also, imposing weight restrictions in DEA models have some shortcomings and misunderstandings. In this paper we utilize the core concept of directional derivative theorem to calculate different elasticity measures in DEA models with weight restrictions. Some theorems have been proved in order to overcome the problem.