WEEKLY SEMINARS

The Department of Economics presents a seminar this week as follows:

Date: Wednesday, 17th February, 2016

Title: Evaluating Airline Performance with Non-oriented Slacks-Based Measures of Super Efficiency

Presenter: Dr James Obben, School of Economics and Finance, Massey University, New Zealand

Time: 1:30 pm – 2:30 pm

Venue: The Conference Room, Department of Economics

 

Please find below an abstract of the paper. We hope you’ll be able to join us. Thank you.

 

 

ABSTRACT

The paper contributes to the literature on airline performance by estimating efficiency measures of airlines using the nonoriented super-efficiency slacks based approach to data envelopment analysis (DEA). The nonoriented aspect of the DEA captures the desire to improve both the inputs and outputs simultaneously; the super efficiency feature allows efficiency scores of more than unity so that efficient airlines can be fully ranked, especially under the variable returns to scale assumption that reflects pure technical efficiency; and the slacks-based aspect guarantees Pareto-efficiency and ensures the provision of a final efficiency score that accounts for all sources of inefficiency. The chosen method does not suffer from the infeasibility problems of the variable returns to scale formulation of super efficiency DEA. Input and output data on 46 international airlines covering the period from 2008 to 2012 were utilised. The sample includes a mixture of low-cost and full-service carriers, alliance affiliated and non-allied airlines, and airlines from different regions of the world to see whether the business model, alliance affiliation or region of origin made a difference. The airlines were ranked according to their efficiency scores under the constant and variable returns to scale assumptions.

Key words: airlines, super-efficiency, data envelopment analysis, slacks-based measure.