Estimating the Range within Which a DMU's True Efficiency Occurs

14 Pages Posted: 24 Dec 2008

See all articles by Darold T. Barnum

Darold T. Barnum

University of Illinois at Chicago

John M. Gleason

Creighton University - College of Business Administration

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.

Suggested Citation

Barnum, Darold T. and Gleason, John M., Estimating the Range within Which a DMU's True Efficiency Occurs (December 23, 2008). UIC College of Business Administration Research Paper No. 08-13, Available at SSRN: https://ssrn.com/abstract=1319770 or http://dx.doi.org/10.2139/ssrn.1319770

Darold T. Barnum (Contact Author)

University of Illinois at Chicago ( email )

1200 W Harrison St
Chicago, IL 60607
United States

John M. Gleason

Creighton University - College of Business Administration ( email )

United States

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