Measuring Quality of Life Using DEA-AR: Focusing on Undesirable Factors

Abstract Dealing with desirable outputs and undesirable outputs is important when measuring Quality of Life (QOL). In addition, the weighting scheme of various QOL indicators must be determined objectively. This paper develops a new model to evaluate QOL, which is based on the DEA-AR model and the CRITIC method proposed by Diakoulaki et al. (1995). To begin, all QOL indicators, including desirable outputs and undesirable outputs, should be normalized to the-larger-the-better. Secondly, the ranking of QOL indicators by importance is determined through the characteristics of the data and the correlation of inter-indicators; thus this is taken as an objective constraint. This new model possesses higher discrimination than the model proposed by Seiford and Zhu (2002), as proved by an empirical analysis.

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