Dealing with Undesirable Outputs in DEA: A Slacks-based Measure (SBM) Approach

In this paper, we propose a new non-parametric DEA scheme for measuring efficiency in the presence of undesirable outputs, based on a slack-based measure(SBM) developed in Tone (2001). We further extend our scheme to cope with non-separable desirable and undesirable outputs. Then we compare our approach with some other methods proposed for this purpose thus far.