Dynamic Efficiency Analysis: Malmquist Index for DEA

The traditional DEA model is a static efficiency analysis technique commonly used in research. It includes the CCR model, which assumes constant returns to scale, and the BCC model, which allows for variable returns to scale. To capture the dynamic changes in firm efficiency over time, the Malmquist index method is introduced. This method effectively measures the relative efficiency and dynamic changes of the same decision-making unit in different periods. The formula for calculating the Malmquist index is as follows: