Evaluating Power Plant Efficiency: Hierarchical Models
In many efficiency-measurement settings there are identifiable groups or clusters of DMUs whose impacts should be captured in the analysis. In such problem settings at least two issues need to be considered. The first is that there may be both DMU-level and cluster-level factors each of which should be considered in their proper settings. The second issue is that we wish to identify both DMU-specific and DMU-cluster efficiency measures. In the current chapter we examine the problem of measuring efficiencies of a set of electric power plants, where each plant consists of a group of power units, hence clustering or grouping occurs naturally.
KeywordsHierarchy Power plants Components Multi-level
- Cook, W. D., Kress, M., & Seiford, L. (1996). Data envelopment analysis in the presence of both quantitative and qualitative factors. Journal of the Operational Research Society, 47, 945–953.Google Scholar
- Thompson, R., Langemeir, L., Lee, C., Lee, E., & Thrall, R. (1990). The role of multiplier bounds in efficiency analysis with application to Kansas farming, Journal of Econometrics, 46, 93–108.Google Scholar