A Data Envelopment Analysis model for ranking digital development in the countries of the European Union without explicit inputs and common weights analysis

Abstract

This study aims to rank the 28 countries of the pre-Brexit European Union (EU) based on the five principal dimensions of the Digital Economy and Society Index (DESI). Instead of ranking them according to the European Commission’s scoring model with arbitrary predefined weights, we use more objective ranking methods that rely on the statistical properties of our data set. We establish our rankings using Data Envelopment Analysis (DEA) Without Explicit Inputs (WEI) or DEA-type Composite Indicators (DEA/CI), and we then determine the position of EU member states. The advantage of the DEA/WEI and DEA/CI methods over the traditional DEA is that they can be applied without distortive data transformations even if we only have output criteria (to be maximized). From a methodological point of view, the paper proposes a new method for determining the common weights, where the goodness of efficiency is measured by correlation.