This paper addresses an important issue in DEA: the selection of inputs and outputs to be included in a model. A two-stage methodology is suggested. The first stage applies a methodology based on comparing reduced models that do not include a particular input/output with extended models that...

DEA has been extensively used to measure the efficiency of financial institutions. Its advantages are clearly understood. But there are many unresolved problems. There are various views based on different modelling philosophies of what constitutes inputs and outputs in a financial institution....