CI-DEA: A Way to Improve the Discriminatory Power of DEA—Using the Example of the Efficiency Assessment of the Digitalization in the Life of the Generation 50+

Anna Łozowicka and Bartłomiej Lach
Additional contact information
Anna Łozowicka: Department of Econometrics, Poznań University of Economics and Business, 61-875 Poznań, Poland
Bartłomiej Lach: Analyx ® , 61-887 Poznań, Poland

Sustainability, 2022, vol. 14, issue 6, 1-22

Abstract: Data envelopment analysis (DEA) is a popular and universal method for examining the efficiency with which decision-making units (DMUs) transform multiple inputs into multiple outputs. However, DEA has its limitations, one of them being its decreasing discriminatory power when the number of analyzed DMUs is insufficient or when there are too many variables (inputs/outputs) describing them. When resigning from any of the variables is impossible or undesired, or when the number of units cannot be increased, CI-DEA, a method proposed in this article, proves to be helpful. It consists of replacing the inputs and/or outputs of the studied DMUs with a smaller number of composite indicators. The aggregation of variables is not based on subjective decisions of the analyst, but depends solely on correlations that exist among variables. The construction of the CI-DEA model makes the interpretation of the results unambiguous and easy. The reliability of the results obtained with CI-DEA have been confirmed by extensive simulation studies performed under conditions of predetermined real-efficiency of DMUs. The usefulness of CI-DEA on real data has been demonstrated on the example of the efficiency assessment of the digitalization in the life of the Generation 50+ in 32 European countries.

Keywords: data envelopment analysis; efficiency; discriminatory power; CI-DEA; PCA-DEA; digitalization; Generation 50+ (search for similar items in EconPapers)
JEL-codes: O13 Q Q0 Q2 Q3 Q5 Q56 (search for similar items in EconPapers)
Date: 2022
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
https://www.mdpi.com/2071-1050/14/6/3610/pdf (application/pdf)
https://www.mdpi.com/2071-1050/14/6/3610/ (text/html)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:gam:jsusta:v:14:y:2022:i:6:p:3610-:d:774704

Access Statistics for this article

Sustainability is currently edited by Ms. Alexandra Wu

More articles in Sustainability from MDPI
Bibliographic data for series maintained by MDPI Indexing Manager ().