Assessing program and managerial efficiencies : with an application to bank branches

Abstract

This paper develops a method, based on the Malmquist index, for the identification of differences in decision making units (DMUs) performance that can be attributed to their association with certain programs (or groups). The new performance index comparing two groups of DMUs can be multiplicatively decomposed into an index comparing the efficiency spread within each group, and an index reflecting the productivity gap between the best practice frontiers. The applicability of the method is illustrated in the context of the comparison of regional performance of bank branches within a country.