Russell and slack-based measures of efficiency: A unifying framework

Some of the popular technical efficiency measures are not able to account for potential slacks in inputs or outputs and may misrepresent the degree of inefficiency pertinent to firms, industries, and countries when compared to their peers. A wide range of methods have been proposed in the literature over the last four decades to address this important issue. The precise relationship among many of these methods is not always clear. In this paper we briefly review this literature and propose a unifying framework for such measures, one which embraces many other important approaches in efficiency measurement (including slack-based measures, Russell efficiency measures, etc.) as special cases in this general framework. A numerical example is also presented to illustrate the differences among the special cases of the efficiency measures, complemented with the computational code in R for practitioners interested in using these models.