Important applications of the super-efficiency CCR model to economic analysis

This article presents the super-efficiency model (SE-CCR), which is one of the most important modifications of the classic CCR model, and describes the main analytical capabilities of the SE-CCR model. Some of these capabilities are direct equivalents to the capabilities of the CCR model, e.g. defining benchmarks, identifying types of scale economies for inefficient objects, constructing target technologies, using simplex reports in the sensitivity analysis of the solution proposed by the SE-CCR model. Other analytical capabilities of the SE-CCR model are specific to the super-efficiency model. Since the SE-CCR model is a generalization of the CCR model, it provides more information and is more general than the classical approach. Everything that can be done using the CCR model can also be achieved by the SE-CCR model. In particular, the super-efficiency approach enables the construction of a full ranking of all objects (hence, also the efficient ones) and to identify the strongest competitors in a group of efficient objects. The author describes two types of efficiency in the super-efficiency approach – classical, which is called ?-efficiency (Farrell’s efficiency), and so-called ?-efficiency. The author also suggests how to determine the significance of technology competitors with respect to a given object and how to determine the structure of technology competition. A simple method for testing the homogeneity of a given group of objects with regard to their efficiency is also provided.