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An alternative metafrontier framework for measuring the heterogeneity of technology
Author(s) -
Wang Qunwei,
Hang Ye,
Hu JinLi,
Chiu ChingRen
Publication year - 2018
Publication title -
naval research logistics (nrl)
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.665
H-Index - 68
eISSN - 1520-6750
pISSN - 0894-069X
DOI - 10.1002/nav.21815
Subject(s) - data envelopment analysis , technology gap , econometrics , value (mathematics) , computer science , economics , mathematics , statistics , international trade
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.