Arbeitspapier
Implications of aggregation uncertainty in DEA
Researchers and practitioners who use Data Envelopment Analysis often want to incorporate several inputs and outputs in their model to consider as much relevant information as possible. However, too many inputs and outputs can result in the well-known dimensionality problem referred to as the "curse of dimensionality". Several studies suggest how to solve, or at least reduce, this problem. One solution is to aggregate the inputs and outputs before using them in the model. This paper examines the implications when the methods used to aggregate the inputs and outputs contain uncertainty. The uncertainty can, for example, be price uncertainty if we use input and/or output prices for the aggregation. We show that the implications for a unit under analysis depend entirely on its input and output mixes relative to those of its peers, and that the implications are higher the more heterogeneous the sector is. As an example, we use the Danish benchmarking regulation of the waste water companies. We find that uncertainty in the regulator's aggregation scheme does not, on average, influence the companies' efficiency scores a lot. Still, individual companies can be greatly affected by this uncertainty.
- Sprache
-
Englisch
- Erschienen in
-
Series: IFRO Working Paper ; No. 2022/02
- Klassifikation
-
Wirtschaft
Mathematical Methods
Semiparametric and Nonparametric Methods: General
Model Construction and Estimation
Model Evaluation, Validation, and Selection
Optimization Techniques; Programming Models; Dynamic Analysis
Input-Output Models
Economics of Regulation
- Thema
-
Data Envelopment Analysis
Regulation
Aggregation Uncertainty
Permutation Tests
- Ereignis
-
Geistige Schöpfung
- (wer)
-
Heesche, Emil
Asmild, Mette
- Ereignis
-
Veröffentlichung
- (wer)
-
University of Copenhagen, Department of Food and Resource Economics (IFRO)
- (wo)
-
Copenhagen
- (wann)
-
2022
- Handle
- Letzte Aktualisierung
-
10.03.2025, 11:44 MEZ
Datenpartner
ZBW - Deutsche Zentralbibliothek für Wirtschaftswissenschaften - Leibniz-Informationszentrum Wirtschaft. Bei Fragen zum Objekt wenden Sie sich bitte an den Datenpartner.
Objekttyp
- Arbeitspapier
Beteiligte
- Heesche, Emil
- Asmild, Mette
- University of Copenhagen, Department of Food and Resource Economics (IFRO)
Entstanden
- 2022
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