Using panel data analysis to estimate confidence intervals for the DEA efficiency of individual decision making units

Darold T. Barnum Department of Managerial Studies and Department of Information and Decision Sciences, College of Business Administration (MC 243), University of Illinois, Chicago 601 South Morgan Street Chicago, IL 60607-7123, USACorrespondence[email protected]

John M. Gleason Department of Information Systems and Technology, College of Business Administration, Creighton University, Omaha, NE 68178, USA

Brendon Hemily Brendon Hemily and Associates, 107 Chester Avenue, Toronto, ON M4K 2Z8, Canada

Abstract

This article demonstrates a methodology using panel data analysis to estimate confidence intervals for the data envelopment analysis efficiency of individual decision making units (DMUs), and the statistical significance of trends in individual DMU efficiency. The procedure accounts for stochastic variations of the inputs and outputs of the target DMU as well as stochastic variations of the inputs and outputs of its efficient benchmark peers. The procedure is demonstrated using 9 years of data from 34 Canadian paratransit agencies.

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Using panel data analysis to estimate confidence intervals for the DEA efficiency of individual decision making units

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Using panel data analysis to estimate confidence intervals for the DEA efficiency of individual decision making units

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