Data Envelopment Analysis

Mikuláš Luptáčik () and Klaus Prettner
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Mikuláš Luptáčik: WU Vienna University of Economics and Business, Department of Economics

Chapter 5 in Mathematical Optimization and Economic Analysis, 2026, pp 149-203 from Springer

Abstract: 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.

Date: 2026
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DOI: 10.1007/978-1-0716-5076-9_5

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