Using fuzzy super-efficiency slack-based measure data envelopment analysis to evaluate Taiwan's commercial bank efficiency

  • Authors:
  • Bo Hsiao;Ching-Chin Chern;Yung-Ho Chiu;Ching-Ren Chiu

  • Affiliations:
  • Department of Information Management, National Taiwan University, Taipei 10617, Taiwan;Department of Information Management, National Taiwan University, Taipei 10617, Taiwan;Department of Economics, Soochow University, Taipei 10048, Taiwan;Department of Business Administration, National Taiwan University of Science and Technology, Taipei 10607, Taiwan

  • Venue:
  • Expert Systems with Applications: An International Journal
  • Year:
  • 2011

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Abstract

Data envelopment analysis (DEA) mainly utilizes envelopment technology to replace production function in microeconomics. The input and output of decision making units (DMUs) are projected into the attributes to evaluate or measure their performance. However, if the inputs and outputs are linguistically termed or are fuzzy-numbered, conventional DEA can not easily measure the performance. Therefore, we propose the use of a fuzzy super-efficiency slack-based measure DEA to analyze the operational performance of 24 commercial banks facing problems on loan and investment parameters with vague characteristics. After our analysis, we find that the fuzzy slack-based measure of efficiency (Fuzzy SBM)/fuzzy super-efficiency slack-based measure of efficiency (Fuzzy Super SBM) can not only effectively characterize uncertainty, but also have a higher capability to evaluate bank efficiency than the conventional Fuzzy DEA approach.