Regional Efficiency Improvement by Means of Data Envelopment Analysis through Euclidean Distance Minimization including Fixed Input Factors – An Application to Tourist Regions in Italy

Standard Data Envelopment Analysis (DEA) is characterized by uniform proportional input reduction or output augmentation in calculating improvement projections. This paper develops a new Euclidean Distance Minimization model in the context of DEA in order to derive a more appropriate efficiency-improving projection model by means of a weighted projection function. The model is extended to the situation where some factor inputs are fixed, for instance, due to lumpiness or natural constraints. The extended DEA model is illustrated in the context of regional planning by using a data set on Italian tourist destination regions.