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Data Envelopment Analysis

In: Mathematical Optimization and Economic Analysis

Author

Listed:
  • Mikuláš Luptáčik

    (WU Vienna University of Economics and Business, Department of Economics)

  • Klaus Prettner

    (WU Vienna University of Economics and Business, Department of Economics)

Abstract

In this chapter, Data Envelopment Analysis (DEA) is introduced as a nonparametric method for production frontier estimation and efficiency analysis. Contrasting it with parametric approaches, the chapter shows how DEA constructs an empirical production frontier from observed data without assuming specific functional forms. It evaluates the relative efficiency of decision-making units and identifies the potential for increasing their efficiency across inputs and outputs. As an important extension of the basic model (taking into account desirable outputs as “goods” and pollution as “bads” or undesirable outputs) with many useful applications, we include ecoefficiency comparisons across countries. DEA’s versatility and interpretability have made it a widely adopted tool in operations research and economics, particularly in areas such as public services, banking, hospital management, agriculture, education, industrial production, and environmental regulations.

Suggested Citation

  • Mikuláš Luptáčik & Klaus Prettner, 2026. "Data Envelopment Analysis," Springer Optimization and Its Applications, in: Mathematical Optimization and Economic Analysis, edition 0, chapter 5, pages 149-203, Springer.
    • Handle: RePEc:spr:spochp:978-1-0716-5076-9_5
    DOI: 10.1007/978-1-0716-5076-9_5
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