Stochastic Two-Stage Data Envelopment Analysis and Dissociation of Overall Efficiency into Product- Process Efficiency: Case Study of 18 Iranian Insurance Companies

The purpose of this paper is to investigate efficiency in a two-stage process that includesstochastic input/output variables where outputs of the first stage serve as inputs of the second stage.Efficiency of each stage and the overall process are independently examined initially. As a nextstep, a relationship between efficiency of the overall process and those of discrete stages areexplored. This effort employs a simulated example where inputs, outputs, and intermediate data arestochastically random. Finally, the results of the relationally random two-stage model are comparedwith those of an independently random two-stage model.

Keywords:

Efficiency , Data Envelopment Analysis , DEA , Random Data , Stochastic , Two- Stage