Efficiency Measurement and Estimation of Return to Scale in Hospitals – DEA Approach

Abstract

This paper discusses the Return to Scale (RTS) in Data Envelopment Analysis (DEA).  DEA is a non-parametric method used to evaluate the relative performance of a set of Decision Making Units (DMU's).  In this paper we attempt to evaluate the relative performance of District Hospitals in the State of Tamil Nadu.  Here each district is considered as DMU.  Input and Output variables are chosen based on the judicial selection and prior knowledge about the operation of the Hospitals.  The basic models namely Charnes Cooper and Rhodes (CCR) and Banker Charnes and Cooper (BCC) with output orientation have applied.  Besides our discussion here we confined to qualitative characterizations, such as, whether RTS is identified as increasing, decreasing or constant.  Empirical investigation was carried out and the results for the above model were listed.