I'm comparing some financial companies using data envelopment analysis(DEA) using their financial statements. Suppose that one of the outputs is income or profit. In some companies we have negative Income or negative profit. Can we use these values beside other positive values in DEA in this financial case? In some companies we have same situation for DEA inputs.
Dear Rahimikia
Please, take a look at the paper
http://link.springer.com/chapter/10.1007%2F978-0-387-71607-7_4#page-1
Best
Canh
Yes, Negative values for the inputs & outputs can be used in DEA only thing is you have to first convert them to positive by adding a common number which can make all negatives to positives. In that case, in case of inputs you have to output oriented models only & case of outputs only input oriented models..
Best
DEA models are not capable of completing an analysis with negative numbers and all numbers must be non-negative and preferably strictly positive. One of the common methods for eliminating the problems of non-positive values in DEA has been through the addition of a sufficiently large positive constant to the values of the input or output that has the non-positive number (Bowlin 1998).
Absolutely yes. Please, look at the links
http://link.springer.com/chapter/10.1007%2F978-0-387-71607-7_4
http://cdn.intechopen.com/pdfs-wm/31672.pdf
1. Can we have to add some common vaue for all the data in variable(Say EPS in my case) of output to make a negative number to positive or only to a single data where negative value is there.
2. And if i have 2 outputs(say EPS and Total Returns), should i add the common number to all data both of the inputs (EPS and Total Returns) or add common value only to EPS where i have negative value
- Badges
- Science topic
- Similar topics
- Philosophy
- Esthetics
- Interpretation