A Generalized Goals-achievement Model in Data Envelopment Analysis: an Application to Efficiency Improvement in Local Government Finance in Japan

Data envelopment analysis (DEA) has become an established benchmark tool in efficiency strategies in both the public and the private sectors. The aim of this paper is to present and apply a newly developed, emerging from a blend of a Distance Friction Minimization (DFM) and a Goals Achievement (GA), model in DEA. The above-mentioned DFM-GA model is illustrated empirically by using a data set of efficiency indicators for cities in Hokkaido prefecture in Japan. In summary, this paper presents a practical policy instrument that may contribute to efficient decision making of both public and private actors.