Estimating right and left returns to scales in data envelopment analysis: A new approach

In this research a new returns to scale (RTS) method is proposed to estimate the right and left returns to scales (RTSs) of the frontier decision making units (DMUs) in data envelopment analysis (DEA). This study modifies Golany and Yu’s RTS method in such a matter that it always can fit within estimating the right and left returns to scales of efficient DMUs. It is necessary to say that, since an inefficient decision making unit (DMU) has more than one projection on the empirical frontier function hence, the different right and left returns to scales can be determined for the inefficient DMU by using our proposed RTS method. Then, an illustrative example highlights the method and also the obtained results of the proposed RTS method are compared with Golany and Yu’s RTS method. A concluding comment, future extensions and suggest possible future direction of research are all summarized in the last section.