Estimating the Range within Which a DMU's True Efficiency Occurs
14 Pages Posted: 24 Dec 2008
Date Written: December 23, 2008
Abstract
We describe a statistical method for estimating DEA score confidence intervals, and illustrate it with panel data of large US transit agencies from the years 2002-2006. The method applies statistical panel data analysis (PDA), which provides proven and powerful methodologies for diagnostic testing and estimation of confidence intervals. Using PDA, we test DEA scores for contemporaneous correlation, serial correlation, heteroskedasticity, and Normal distribution. To adjust for the violations that occur, we use a well-known PDA Generalized Least Squares statistical model that accounts for the violations in its estimation of confidence intervals.
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