The concept of cost efficiency has become tremendously popular in data envelopment analysis (DEA) as it serves to assess a decision-making unit (DMU) in terms of producing minimum-cost outputs. A large variety of precise and imprecise models have been put forward to measure cost efficiency for the DMUs which have a role in constructing the production possibility set; yet, there’s not an extensive literature on the cost efficiency (CE) measurement for sample DMUs (SDMUs). In an effort to remedy the shortcomings of current models, herein is introduced a generalized cost efficiency model that is capable of operating in a fuzzy environment-involving different types of fuzzy numbers-while preserving the Farrell’s decomposition of cost efficiency. Moreover, to the best of our knowledge, the present paper is the first to measure cost efficiency by using vectors. Ultimately, a useful example is provided to confirm the applicability of the proposed methods.
Regulatory Contracts and Cost Efficiency: Stochastic Frontier Evidence from the Italian Local Public Transport
