A SIMPLE CHARACTERIZATION OF RETURNS TO SCALE IN DEA

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  • Tone Kaoru
    Graduate School of Policy Sciences Saitama University

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  • Simple Characterization of Returns to S

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In this paper, we will present a simple method for deciding the local returns-to-scale characteristics of DMUs (Decision Making Units) in Data Envelopment Analysis. This method proceeds as follows: first, we solve the BCC (Banker-Charnes-Cooper) model and find the returns-to-scale of BCC-efficient DMUs and a reference set to each BCC-inefficient DMU. We can then decide the local returns-to-scale characteristics of each BCC-inefficient DMU by observing only the returns-to-scale characteristics of DMUs in their respective reference sets. No extra computation is required. We can apply this method to the output-oriented model and to the additive model as well.

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