The Environmental Efficiency Analysis Based on the Three-Step Method for Two-Stage Data Envelopment Analysis

This paper suggests that the efficiency of a system (decision-making unit) and its subsystem cannot be properly measured using two-stage data envelopment analysis (DEA) model either in cooperative or non-cooperative evaluation. Indeed, existing methods subjectively determine status subsystems whole system. The DEA models, game game, are used to analyze environmental efficiency. However, when actual relationship between two is inconsistent with subjective assumptions, overall each will biased. conventional models require predetermining within based on judgment decision-maker. Based this, this proposes three-step method solve DEA. First, position relation among determined according optimal weights through model. According subsystems, decision units grouped, group. reduces subjectivity making analyzes unit applying most appropriate find source inefficiency. Finally, verifies rationality validity by analyzing water use industrial systems China. It found regions China value economic development more than protection (as evidenced weights). What more, proposed can generalized for any problem.