Procedures for ranking technical and cost efficient units: With a focus on nonconvexity

This contribution extends the literature on super-efficiency by focusing on ranking cost-efficient observations. To the best of our knowledge, the focus has always been on technical super-efficiency and this focus on ranking cost-efficient observations may well open up a new topic. Furthermore, since the convexity axiom has both an impact on technical and cost efficiency, we pay a particular attention to the effect of nonconvexity on both super-efficiency notions. Apart from a numerical example, we use a secondary data set guaranteeing replication to illustrate these efficiency and super-efficiency concepts. Two empirical conclusions emerge. First, the cost super-efficiency notion ranks differently from the technical super-efficiency concept. Second, both cost and technical super-efficiency notions rank differently under convex and nonconvex technologies.(c) 2021 Elsevier B.V. All rights reserved.

Automated summary

This contribution extends the literature on super-efficiency by focusing on ranking cost-efficient observations. It opens up a new topic by shifting the focus to ranking cost-efficient observations. The study also examines the effect of nonconvexity on super-efficiency notions.