Hierarchical data envelopment analysis for confirming performance improvement

In order to measure a trend of inefficient DMUs, this research has enhanced the hierarchical DEA model to time dependent situation applying discriminant analysis as a new evaluation index. The hierarchical DEA model classifies inefficient DMUs into the frontiers that are related to the order. A new index for time dependent situation by discriminant analysis is to measure the time trend in t+1 period keeping the already-known discriminant criterion in t period. Applying the proposed index to Japanese prefectures data sets, this research has shown how the proposed technique works.