What is the two-stage DEA model? How does it measure efficiency?

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What is the two-stage DEA model? How does it measure efficiency?

In: Economics

I’m currently studying third year Operations Research. While I cant exactly explain *Two-Stage* DEA, I can explain DEA. The Data Envelopment Analysis model is a process that basically compares the inputs and outputs of different but related companies/businesses to measure efficiency.

It would take, say, the input of a hospital (the kind of patients they bring in), the outputs (how they treat the patients and how many they discharge) and compare it to the inputs and outputs of other hospitals around it. Here, analysts sets constraints and can mathematically determine, using Simplex methods, the efficiency as a percentage. Depending on the Simplex method they use, hospital 1’s constraints say its running at 100% efficiency, but hospital 2 is running at 70% efficiency (maybe they didnt cure as many patients or something)

Higher than 100% efficiency is possible but rarely ever seen, unless the company has some really dedicated empllyees etc etc.
For anyone else reading this, feel free to correct me on any innacuracies