Incorporating value judgments into port efficiency measurement models: insights from Turkish ports

Abstract

Several inputs and outputs which have relative contributions to overall port performance are used in port efficiency measurement models. While some inputs are vital to produce higher output, some others are relatively less important. Also, for managers, some outputs are more desirable than others. Ignoring the issue of "relative contributions" and considering all inputs and outputs to be of equal importance may lead to unreliable results. This research aims to incorporate value judgments and strategic thinking into port efficiency measurement models. Data envelopment analysis is used to estimate port efficiency, and the assurance region method is applied to incorporate expert opinions into data envelopment models. Results show that expert opinions have a great impact on efficiency scores and may lead to dramatic decreases in average efficiency. The reasons of such changes are explained with the use of optimal weights and virtual inputs/outputs, and the necessity of value judgments in port efficiency measurement models is demonstrated.