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Capturing the environment, a metafrontier approach to the drinking water sector
Author(s) -
De Witte Kristof,
Marques Rui C.
Publication year - 2009
Publication title -
international transactions in operational research
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 1.032
H-Index - 52
eISSN - 1475-3995
pISSN - 0969-6016
DOI - 10.1111/j.1475-3995.2009.00675.x
Subject(s) - set (abstract data type) , computer science , measure (data warehouse) , environmental economics , risk analysis (engineering) , business , economics , data mining , programming language
Environmental factors add complexity to the comparison between specific activities or entire entities. Decision making units with an inferior performance are tempted to invoke that their organization is “different” from the others in the data set. By reinterpreting and extending the metafrontier literature, we propose an all‐embracing concept to fully capture the operational environment. We suggest the “Group Specific Technical Efficiency” as a new measure to assess the overall efficiency of a utility while allowing for environmental differences. A real‐world example of drinking water utilities from five different countries illustrates the concept.