A Comparison of Regression Analysis and Data Envelopment Analysis as Alternative Methods for Performance Assessments

This paper compares regression analysis and data envelopment analysis as two alternative methods for assessing the comparative performance of homogeneous organizational units such as bank branches or schools. The comparison is restricted to units using a single resource or securing a single output. It focuses on the estimates of relative efficiency, marginal input-output values and target input-output levels that the two methods offer. A set of hypothetical hospitals is used to illustrate the performance of the two methods. It is found that, in general, data envelopment analysis outperforms regression analysis on accuracy of estimates but regression analysis offers greater stability of accuracy.

[1]  R. Dyson,et al.  Reducing Weight Flexibility in Data Envelopment Analysis , 1988 .

[2]  Abraham Charnes,et al.  Preface to topics in data envelopment analysis , 1984, Ann. Oper. Res..

[3]  A. Bessent,et al.  Efficiency Frontier Determination by Constrained Facet Analysis , 1988, Oper. Res..

[4]  Michael Barrow,et al.  Efficiency Measurement in the Public Sector: An Appraisal , 1989 .

[5]  T. J. Cook,et al.  Evaluating the administrative efficiency of courts , 1982 .

[6]  Emmanuel Thanassoulis,et al.  Estimating preferred target input−output levels using data envelopment analysis , 1992 .

[7]  A. Charnes,et al.  Some Models for Estimating Technical and Scale Inefficiencies in Data Envelopment Analysis , 1984 .

[8]  M. Farrell.  The Measurement of Productive Efficiency , 1957 .

[9]  Emmanuel Thanassoulis,et al.  Applied data envelopment analysis , 1991 .

[10]  William W. Cooper,et al.  Evaluation of Educational Program Proposals by Means of DEA , 1983 .

[11]  Abraham Charnes,et al.  Data envelopment analysis and regression approaches to efficiency estimation and evaluation , 1984, Ann. Oper. Res..

[12]  Leslie Rosenthal,et al.  The growth and efficiency of public spending , 1988 .

[13]  Abraham Charnes,et al.  Measuring the efficiency of decision making units , 1978 .

[14]  Emmanuel Thanassoulis,et al.  Relative Efficiency Assessments Using Data Envelopment Analysis: An Application to Data on Rates Departments , 1987 .

[15]  P. Schmidt.  Frontier production functions , 1985 .

[16]  R. Banker,et al.  A Comparative Application of Data Envelopment Analysis and Translog Methods: An Illustrative Study of Hospital Production , 1986 .