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A well-defined composite indicator: an application to corporate social responsibility. (English) Zbl 1442.90095
Summary: This paper introduces a model to construct composite indicators for performance evaluation of decision making units, which is based upon the determination of the least distance from each assessed unit to a frontier estimated by data envelopment analysis. This generates less demanding targets from a benchmarking point of view. The model also makes it possible to account for the existence of slacks in all the considered dimensions (sub-indicators), playing with the notion of Pareto efficiency. Additionally, our approach satisfies units invariance, translation invariance and strong monotonicity and ensures that the weights used for the aggregation of the sub-indicators are always strictly positive. All previous approaches based on data envelopment analysis have failed to satisfy at least one of these properties. We also implement a new version of the Russell output measure of technical efficiency working with full-dimensional efficient facets. Finally, the new approach is illustrated by an application to the sphere of corporate social responsibility, showing the main empirical implications of the theoretical properties.
90B50 Management decision making, including multiple objectives
90C05 Linear programming
90C11 Mixed integer programming
91B38 Production theory, theory of the firm
62R07 Statistical aspects of big data and data science
Full Text: DOI
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