Abstract:

How to allocate a resource efficiently and fairly attracts the attention of both researchers and practitioners. Data envelopment analysis (DEA) has been brought to bear on its solution. The existing literature applies Gini coefficient to measure the fairness in the resource allocation process. However, the Gini coefficient is inapplicable in many applications. This paper proposes a novel centralized resource allocation model based on DEA that considers both the efficiency and the fairness. This paper adopts a notion of fairness, namely α-fairness that is well studied in welfare economics and is of practical significance. The new model integrates α-fairness with DEA to support resource allocation decisions. It aids decision makers in making a trade-off between the efficiency and the fairness. An illustrative application is used to validate the proposed approach.