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Programmatic efficiency comparisons between unequally sized groups of DMUs in DEA

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  • G Simpson

    (Aston University)

Abstract

Data envelopment analysis (DEA) is a popular non-parametric technique for determining the efficiency of a homogeneous set of decision-making units (DMUs). In many practical cases, there is some doubt if the all the DMUs form a single group with a common efficiency distribution. The Mann–Whitney rank statistic has been used in DEA both to test if two groups of DMUs come from a common efficiency distribution and also to test if the two groups have a common frontier, each of which are likely to have important but different policy implications for the management of the groups. In this paper it is demonstrated that where the Mann–Whitney rank statistic is used for the second of these it is likely to overestimate programmatic inefficiency, particularly of the smaller group. A new non-parametric statistic is proposed for the case of comparing the efficient frontiers of two groups, which overcomes the problems we identify in the use of the Mann–Whitney rank statistic for this purpose.

Suggested Citation

  • G Simpson, 2005. "Programmatic efficiency comparisons between unequally sized groups of DMUs in DEA," Journal of the Operational Research Society, Palgrave Macmillan;The OR Society, vol. 56(12), pages 1431-1438, December.
    • Handle: RePEc:pal:jorsoc:v:56:y:2005:i:12:d:10.1057_palgrave.jors.2601961
    DOI: 10.1057/palgrave.jors.2601961
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    References listed on IDEAS

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    6. Patrick L. Brockett & Boaz Golany, 1996. "Using Rank Statistics for Determining Programmatic Efficiency Differences in Data Envelopment Analysis," Management Science, INFORMS, vol. 42(3), pages 466-472, March.
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    Cited by:

    1. Hampf, Benjamin & Krüger, Jens, 2010. "Technical Efficiency of Automobiles – A Nonparametric Approach Incorporating Carbon Dioxide Emissions," Publications of Darmstadt Technical University, Institute for Business Studies (BWL) 43177, Darmstadt Technical University, Department of Business Administration, Economics and Law, Institute for Business Studies (BWL).
    2. Alexandr Gedranovich & Mykhaylo Salnykov, 2012. "Productivity analysis of Belarusian higher education system," BEROC Working Paper Series 16, Belarusian Economic Research and Outreach Center (BEROC).
    3. Julian H. Tice & António C. Moreira & Cláudia Sarrico, 2008. "Economic Performance Of Portuguese Companies 1989-1999: A Dea Study," Portuguese Journal of Management Studies, ISEG, Universidade de Lisboa, vol. 0(1), pages 111-128.
    4. Hampf, Benjamin & Krüger, Jens J., 2010. "Technical efficiency of automobiles: A nonparametric approach incorporating carbon dioxide emissions," Darmstadt Discussion Papers in Economics 198, Darmstadt University of Technology, Department of Law and Economics.
    5. Thanassoulis, Emmanuel & Silva Portela, Maria & Graveney, Mike, 2016. "Identifying the scope for savings at inpatient episode level: An illustration applying DEA to chronic obstructive pulmonary disease," European Journal of Operational Research, Elsevier, vol. 255(2), pages 570-582.
    6. Seyed Ali Rakhshan, 2017. "Efficiency ranking of decision making units in data envelopment analysis by using TOPSIS-DEA method," Journal of the Operational Research Society, Palgrave Macmillan;The OR Society, vol. 68(8), pages 906-918, August.

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    data envelopment analysis; statistics;

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