Measuring Efficiency of Organizational Units in Forestry by Nonparametric Model

Abstract

This paper assesses the efficiency of basic organizational units in the Croatian forestry, forest offices, by applying Data Envelopment Analysis (DEA). DEAis a nonparametric methodology for measuring relative efficiency of comparable decision making units with more inputs and outputs. The relative efficiency of compared forest offices is calculated with the most frequently used DEAmodels – CCR and BCC model. According to the results of global technical efficiency, obtained by CCR model, average relative efficiency amounts to 0.829. Local pure technical efficiency, obtained by BCC model is 0.904, and scale efficiency is 0.919. The results also include the calculation of efficiency frontier, frequency of efficient units in reference set of inefficient units, determination of sources and values of inefficiencies, influence of the forest offices’ structural characteristics on their efficiency and the average efficiency of forest offices grouped with respect to the forest administrations and regions they belong to. The research reveals DEA as a powerful multi criteria decision making tool and a possible, very valuable support in forest management.