Negative Data in DEA: A Simple Proportional Distance Function Approach

The need to adapt Data Envelopment Analysis (DEA) and other frontier models in the context of negative data has been a rather neglected issue in the literature. A recent article in this journal proposed a variation on the directional distance function, a very general distance function that is dual to the profit function, to accommodate the occurrence of negative data. In this contribution, we define and recommend a generalised Farrell proportional distance function that can do the same job and that maintains a proportional interpretation under mild conditions. © 2011 Operational Research Society Ltd. All rights reserved.status: publishe