Undesirable outputs in efficiency valuations

Abstract Efficiency measurement is usually based on the assumption that inputs have to be minimized and outputs have to be maximized. In a growing number of applications, however, undesirable outputs are incorporated into the production model which have to be minimized. In this paper various approaches for treating such outputs in the framework of Data Envelopment Analysis (DEA) are discussed and the resulting efficient frontiers are compared. New radial measures are introduced which assume that any change of the output level will involve both undesirable and desirable outputs.

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