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EMS: Efficiency Measurement System

User's Manual

holger scheel

version 1.3
2000-08-15

Contents

1 Introduction 2

2 Preparing the input output data 2.1 2

Using MS Excel files . . . . . . . . . . . . . ........... . . . . . .3
2.2 Using textfiles . . . . . . . . . . . . . . . . . ........... . . . . . .3
2.3 Non-discretionary inputs and outputs . . . ........... . . . . . .4

3 Preparing weights restrictions 3.1 4

Using MS Excel files . . . . . . . . . . . . . ........... . . . . . . 5
3.2 Using textfiles . . . . . . . . . . . . . . . . . ........... . . . . . . 5

4 Starting EMS and loading data 6

5 Running a DEA model 5.1 6

Preparing the results format . . . . . . . . . ........... . . . . . .6
5.2 Choosing a technology structure . . . . . . ........... . . . . . . 7
5.3 Choosing an efficiency measure . . . . . . . ........... . . . . . . 7
5.4 Advanced modeling options . . . . . . . . . ........... . . . . . . 10

6 Results eleven

7 Acknowledgments 12

8 Disclaimer 12

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1 Introduction

1 Introduction

Efficiency Measurement System (EMS) is a software for Windows 9x/NT which computes Data
Envelopment Analysis (DEA) efficiency measures. This manual is intended to be an introduction to the
usage of the software. It is not an introduction to DEA which you can find eg in the following books:

• HO Fried, CAK Lovell, and S. Schmidt (1993), The measurement of productive efficiency:
Techniques and applications, Oxford University Press, New York.

¨
• R. Fare, S. Grosskopf, and CAK Lovell (1994), Production Frontiers, Cambridge University Press,
Cambridge

• A. Charnes, WW Cooper, AY Lewin, and LM Seiford (1994), Data Envelopment Analysis: Theory,
Methodology, and Application, Kluwer Academic Publishers, Dordrecht

• WW Cooper, LM Seiford, and K. Tone (2000), Data Envelopment Analysis: A Comprehensive Text
with Models, Applications, References and DEA Solver Software, Kluwer Academic Publishers,
Norwell, Massachusetts.
The latest news about EMS, downloads and bugfixes you'll find on the EMS home
page:

http://www.wiso.uni-dortmund.de/lsfg/or/scheel/ems/ EMS uses

the LP Solver DLL BPMPD 2.11 by Csaba M´esz´aros for the computation of the scores (Sources: http://
www.netlib.org). It is an interior point solver.
If you have questions which are not answered in the following paragraphs or if you have suggestions
for further developments send an email to
[email protected]

2 Preparing the input output data

The first and probably most difficult step in an efficiency evaluation is to decide which input and output
data should be included. EMS accepts data in MS Excel or in text format. Additionally to “standard”
inputs and outputs EMS can also handle “non discretionary” inputs and outputs (ie, data which are not
controlled by the DMUs).
The next sections describe how the data files should be prepared for EMS. The size of your analysis is
limited by the memory of your PC. I.e., there is theoretically no limitation of the number of DMUs, inputs
and outputs in EMS. Although the code is not optimized for large scale data, we successfully solved
problems with over 5000 DMUs and about 40 inputs and outputs. (Please let me know your experience
with larger datasets.)

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2 Preparing the input output data

2.1 Using MS Excel files

EMS accepts Excel 97 (and older) files (*.xls). The input output data should be collected in one
worksheet. Don't use formulas in this sheet, it should only contain the pure data and nothing else.
EMS needs the following data format:

Data

{YO}
{EITHER}

• The name of the worksheet must be “Data”.

• The first line contains the input/output names. First inputs, then outputs.

• Input names contain the string “{I}”.

• Output names contain the string “{O}”.

• The first column contains the DMU names.

Cf. the example file EXAMPLE.XLS

2.2 Using text files

For those who prefer another spreadsheet software than MS Excel, EMS accepts also plain text files
(*.txt). For reading text files correctly EMS needs the file schema.ini which contains some formatting
information. The following is necessary for using text files with EMS:

schema.ini

• Put schema.ini in the same directory where your text files are.

• Modify schema.ini by replacing “[Yourfile.txt]” by the name of your file.

The text file which contains the input output data should then satisfy the following:

• Columns are separated by Tabs. Make sure that exactly one Tab appears between two columns
and that you don't have Tabs at other places in the file (eg at the end). You can check this in a
texteditor by making the Tabs “visible”.

• Input names contain the string “{I}”.

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3 Preparing weights restrictions

• Output names contain the string “{O}”.

• The first column contains the DMU names.

Cf. the example file EXAMPLE.TXT.

2.3 Non-discretionary inputs and outputs

EMS accepts non-discretionary data if in the data file the corresponding input name contains “{IN}”
instead of “{I}”, or the corresponding output name contains “{ON}” instead of “{O}”.

{IN}
{ON}

When EMS computes an efficiency score (which is a distance to the efficient frontier) it doesn't
alter the values of non-discretionary data. I.e., the distance will only be computed in the directions
of the “normal” (discretionary) inputs and outputs while the non-discretionary are fixed.

Literature: EMS uses the idea of RD Banker and RC Morey (1986), Efficiency Analysis for
Exogenously Fixed Inputs and Outputs, Operations Research, 34, 513–521. See also for an
overview: M. Staat (1999), Treating non-discretionary variables one way or the other:
Implications for efficiency scores and their interpretation, In G. Westermann (ed.), Data
Envelopment Analysis in the Service Sector, pp. 23–50, Gabler, Wiesbaden.

3 Preparing weights restrictions

You can specify weights restrictions of the form W(p, q) ÿ 0, where p is the vector of input weights
and q is the vector of output weights (or shadow prices). Hence, you can incorporate both “Cone
Ratio” constraints and “Assurance Region” constraints.

Example. Suppose you have 3 inputs and 2 outputs and you want to have the restriction p1 ÿ p2
then corresponding row in the weights restriction matrix W is (1; ÿ1; 0; 0; 0). If you have in
addition bounds on the marginal rates of substitutions like 0.3 ÿ ÿ 3, then you transform
q1
them into two
q2 constraints q1 ÿ0.3q2 ÿ 0 and ÿq1 + 3q2 ÿ 0, yielding the rows (0; 0; 0; 1 ;ÿ0.3)

and (0;0;0;ÿ1;3) in the matrix W. Thus in this example one has

1ÿ1 0 0 0
W= ÿ 0 0 0 1 ÿ0.3 ÿ

ÿ 0 0 0 ÿ1 3 ÿ

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3 Preparing weights restrictions

Like the input output data EMS accepts weights restriction data W in MS Excel and text files.

3.1 Using MS Excel files

EMS accepts Excel 97 (and older) files (*.xls). The weights restriction data should be collected in one
worksheet. Don't use formulas in this sheet, it should only contain the pure data and nothing else. EMS
needs the following data format:

Weights

• The name of the worksheet must be “Weights”. (It can be contained in the same
file as the “Data” sheet, but you may also choose another file.)

• The first row (the input/output names) should be identical to the corresponding
Data sheet.

• The first column contains a name for each restriction.

Cf. the example file EXAMPLE.XLS

3.2 Using text files

If you have W in a textfile, you'll have to do the same like for the input output data: First put the file
schema.ini in the directory of your textfiles and modify it, ie, replace “[Yourweightfile.txt]” by the name of
your file.
The textfile which contains W should then satisfy the following:

• Columns are separated by Tabs.

• The first row (the input/output names) should be identical to the corresponding
input output data file.

• The first column contains a name for each restriction.

Cf. the example file WEIGHTS.TXT.

Literature: See for an overview: R. Allen, A. Athanassopoulos, R. Dyson, and E. Thanassoulis (1997),
Weights restrictions and value judgments in Data Envelopment Analysis: Evolution, development
and future directions, Annals of Operations Research, 73 , 13–34.

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4 Starting EMS and loading data

4 Starting EMS and loading data

When you've prepared the data in Excel and/or text files as described above you can start EMS by
clicking on it in the program folder.

Menu File
Load data (Ctrl+O)

Now you should connect EMS to the data: Your input output data can be loaded by pressing Ctrl+O
(Menu File ÿ Load data). If you select an appropriate filename then EMS tries to connect to this file.
For large scale DEA evaluations with thousands of DMUs this connection may need a few seconds.
The connection was successful
• if the filename appears in the status bar (at the bottom of the EMS window) and
• the sand clock vanishes.

EMS does not display your data! If you want to edit your data, you should open the datafile in
Excel or in your texteditor and edit it there. You should save the changes (it's not necessary
to close the file) and then Load data (Ctrl+O) in EMS again. EMS always loads the file version
from the harddisk.

Menu File
Load Weight Restr (Ctrl+W)

The file which contains the matrix W can be loaded by pressing Ctrl+W (Menu File ÿ Load Weight
Restr). When the file is successfully loaded its name is displayed in the status bar (like the input
output data file).

5 Running a DEA model

bpmd.par

Before running a DEA model, make sure that the file bpmpd.par is in the same folder as your data
file!

5.1 Preparing the results format

AED Menu
Format (Ctrl+F)

Ctrl+F (Menu DEA ÿ Format) will display the Format dialog. Here, you may specify the number of
decimals to display in the results table which will be produced by EMS.

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5 Running a DEA model

Moreover, you can decide whether

• the pure input and ouput weights (shadow prices) pi and qj should be displayed
(Option pure weights) or

• the “virtual inputs and outputs”, ie the weights multiplied by the input and
output values pi xi0 , qj yj0 (Option virtual inputs/outputs)

should be displayed in the results table.

5.2 Choosing a technology structure

Ctrl+M (Menu DEA ÿ Run model) will display a dialog where you can specify the model you want
to compute. Under Models you may choose between various technology structures:

AED Menu
Run model (Ctrl+M)
structure
Returns to Scale

• convex and nonconvex envelope,

• constant, variable, nonincreasing or nondecreasing returns to scale.

5.3 Choosing an efficiency measure

An efficiency measure quantifies in one way or another a “distance” to the efficient front tier of
the technology. EMS allows computation of various distances in input-, output and non-oriented
versions.

orientation

An input oriented measure quantifies the input reduction which is necessary to become efficient
holding the outputs constant. Symmetrically, an output oriented measure quantifies the necessary
output expansion holding the inputs constant. A non-oriented means sure quantifies necessary
improvements when both inputs and outputs can be improved simultaneously.

It seems that in applications the choose of a certain measure mostly depends on three criteria:

• The “primal” interpretation, ie the meaning of the efficiency score with respect
to input and output quantities,

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5 Running a DEA model

• the “dual” interpretation, ie the meaning of the efficiency score with respect to input and output
prices,

• the axiomatic properties of the efficiency measure (eg monotonicity, units invariance, indication
of efficiency, continuity).

Most of the measures are similar with respect to these criteria, when in this manual only essential
differences are mentioned roughly1 when the measures are defined below.
what

T denotes the technology and (Xk , ) denotes

AND
the input output data of the DMU under evaluation.

Distance

Radial: This measure (aka Debreu-Farrell-measure, or “radial part” of the CCR/BCC measure)
indicates the necessary improvements when all relevant factors are improved by the same
factor equiproportionally. Its oriented versions have nice price interpretations (cost reduction/
revenue increase), but it doesn't indicate Koop mans efficiency.

what

non-oriented: max{ÿ | ((1 ÿ ÿ)Xk ,(1 + ÿ)Y )ÿT}

what

input: min{ÿ | (ÿXk , AND

)ÿT}
what

output: max{ÿ | (Xk , ÿY )ÿT}

See MJ Farrell (1957), The measurement of productive efficiency, Journal of the Royal
Statistical Society, Series A, 120(3), 253–290.

Additive: This measure quantifies the maximal sum of absolute improvements (input reduction/
output increase measured in “slacks”). It has a price interpretation (as difference between
actual and maximal profit) and indicates Koopmans efficiency but it isn't invariant with respect
to units of measurement.

non-oriented: max what

+ t) ÿ T , (s, t) 0
i yes + j tj | (Xk ÿ s, Y
)ÿT , s0
what

input:max i yes | (Xk ÿ s, Y

,t0
what

output:max j tj | (Xk ,
AND
+ t) ÿ T

See A. Charnes, WW Cooper, B. Golany, L. Seiford, and J. Stutz (1985), Foundations of

Data Envelopment Analysis for Pareto-Koopmans efficient empirical production functions,
Journal of Econometrics, 30, 91–107.
1A more detailed overview is given (in German) in H. Scheel (2000), Effizienzmaße der Data Envel
Opment Analysis, Gabler, Wiesbaden.

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5 Running a DEA model

If you want to compute a weighted objective function i wi si you can do this

by preprocessing the data; eg you may multiply each input/output i by the
corresponding wi .

maxAverage: This measure (aka F¨are-Lovell or Russell or SBM measure) quantifies

the maximal average of relative improvements (input reduction/output increase
measured in percentages of the current level). It has no straight forward price
interpretation but it is both an indicator for Koopmans efficiency (for positive
data) and units invariant. The symbol denotes the componentwise product of
two vectors, i.e.

what what what

((1ÿÿ)Xk ,(1+ÿ)Y ) := ((1+ÿ1)Xk 1 , . . . ,(1+ÿm)Xk m; (1+ÿ1)Y 1 , . . . ,(1+ÿn)Y no ).

i:xk >0 ÿi + what

>0 ÿj
non-or.: max
Yo j:y j (ÿ, ÿ) ÿ 0,
i:Xk >0 1 + 1 ((1 ÿ ÿ) Xk ,(1 + ÿ) Y
what

)ÿT
>0
what

Yo j:y j

i:xk >0 ÿi
input:min | (ÿ Xk , AND ) ÿ T , ÿ 1
Yo what

i:xk >0
1
Yo

j:Y >0
what
ÿj
j
output:max what 1 | (Xk , ÿY
what

)ÿT,ÿ1
j:Y >0
j

¨
See R. Fare and CAK Lovell (1978), Measuring the technical efficiency of
production, Journal of Economic Theory, 19, 150–162.

minAverage: This measure quantifies the minimal average of relative improvements

which is necessary to become weakly efficient. (Weak efficiency means there does
there is no point in the technology set which is better in every input and output.
We denote the weakly efficient subset of T by ÿT .) Notice that for a weakly efficient point an
arbitrary small improvement suffices to become Koopmans efficient
when the minAverage measure also quantifies the infimum average of improve ments which is
necessary to become Koopmans efficient.
It has neither a straight forward price interpretation nor is it an indicator for Koop mans efficiency
but it is units invariant.

i:xk >0 ÿi + what

>0 ÿj
non-or.: min
Yo j:y j (ÿ, ÿ) ÿ 0,
1+ 1 ((1 ÿ ÿ) Xk ,(1 + ÿ) Y
what

) ÿ ÿT
i:xk >0 >0
what

Yo j:y j

i:Xk >0 ÿi
input:max | (ÿ Xk , AND ) ÿ ÿT , ÿ1
Yo what

i:xk >0
1
Yo

j:Y >0
what
ÿj
j
output:min what 1 | (Xk , ÿY
what

) ÿ ÿT , ÿ 1
j:Y >0
j

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5 Running a DEA model

This measure is based on ideas in A. Charnes, JJ Rousseau, and JH Semple (1996),

Sensitivity and Stability of Efficiency Classifications in Data Envelopment Analysis, The
Journal of Productivity Analysis, 7, 5–18. See also W. Briec (1999), H¨older distance
function and measurement of technical efficiency, Journal of Productivity Analysis, 11,
111–132.

superefficiency

If you choose a radial distance then EMS allows you to compute so called “superefficiency”
scores by checking the box. For inefficient DMUs the superefficiency score coincides with the
standard score defined above. For efficient DMUs a score is computed which indicates the
maximal radial change which is feasible such that the DMU remains efficient. Formally, it is
defined like the standard score but the DMU under evaluation is excluded from the constraints
(ie the definition of the technology set). See P. Andersen and NC Petersen (1993), A Procedure
for Ranking Efficient Units in Data Envelopment Analysis, Management Science, 39, 1261–1264.

big

If you have chosen the superefficiency model, then in the results table a score = big may appear.
This means that the DMU remains efficient under arbitrary large increased inputs (input oriented)
or decreased outputs (output oriented), respectively.

restrict weights

If you have loaded weights restrictions data, you can check this box to incorporate the weights
restrictions in the model. (If the box is not checked, then the weights restrictions will be ignored.)

5.4 Advanced modeling options

When you have opened the Run model dialog (Ctrl+M or Menu DEA ÿ Run model) then you may
specify some advanced models in Options which are described in the following paragraphs.

review
Technology

You may specify selections of DMUs which should be computed (Evaluation) and which should
be used for building the envelopment (Technology). This allows you to compute program
efficiency. I.e., for each DMU selected in Evaluation a score is computed

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6 Results

constrained by the DMUs selected in Technology. The lists allow selections of multiple
entries via Ctrl+click and Shift+click.

Window Analysis
malmquist

If you have panel data sorted by periods T = 0, ..., t ie the first column of the data file looks
like
DMU 1 T0
DMU 2 T0
.
.
.
DMU nT0
DMU 1 T1
.
.
.
DMU nT1
.
.
.
DMU 1 Tt
.
.
.
DMU nTt

then EMS supports computation of Window Analysis and Malmquist indices.

For Window Analysis you have to specify the number of periods and the window width.

For Malmquist indices you have to specify the number of periods. EMS computes then
scores E(t)-T(t+1), ie the DMUs of period t are evaluated with respect to the technology
built by the DMUs in period t+1. The scores E(t)-T(t) can be computed by running a
Window Analysis with window width = 1. Dividing these scores is left to your spreadsheet.
See the Malmquist sheet in example.xls for details.

6 Results

If computations are finished, EMS will display the results in a table. The window caption
tells which model was computed, eg example.xls CRS RAD IN WR-example contains the
results of a DEA model based on the input output data file example.xls with constant
returns to scale, radial distance, input orientation, weights restrictions with restriction
matrix stored in example.xls.
The result table contains: (recall that the number of decimals to display can be
modified in Menu DEA ÿ Format)

DMU name. An additional {X} indicates that this DMU was excluded from building the
technology as specified in Technology. A DMU name without score indicates that
this DMU built the technology but was not evaluated as specified in Evaluation.

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7 Acknowledgments

The efficiency score as defined above.

the weights (shadow prices) {W} or virtual inputs/outputs {V} as selected in Menu DEA
ÿ Format,

benchmarks:

• for inefficient DMU: the reference DMUs with corresponding intensities (the “lambdas”) in
brackets
• for efficient DMU: the number of inefficient DMUs which have chosen the
DMU as Benchmark,

slacks {S} or factors {F}. Depending on the chosen distance, for radial and additive measures the
slacks are displayed. For the minAverage and maxAverage measures the factors (ie the ÿi ,
ÿj as defined above) are displayed. In addition, for the minAverage measure slacks are
displayed for those inputs and outputs with factors = 1 (or 0 for non-oriented measure).

For Nonconvex (FDH) models, instead of the weights for each DMU the number of dominated and
dominating DMUs and lists of these DMUs are displayed.

Copy
Save

The result table can be copied to your spreadsheet via the Windows clipboard: Use Menu Edit ÿ
Copy (Ctrl+C) for copying your current selection or Copy All (Ctrl+A) for the whole results table.

The result table can be saved as an ASCII file (Menu File ÿ Save or Save As).

7 Acknowledgments
Thanks to BPMPD's author Csaba M´esz´aros for the kind support during the development of EMS.
Thanks to Laurens Cherchye for valuable discussions.

8 Disclaimer

The author of the program described here accepts no responsibility for damages resulting from the
use of this software and makes no warranty, either express or implied, including, but not limited to,
any implied warranty of fitness for a particular purpose. The software is provided as it is, and you, its
user, assume all risks when using it.

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