Abstract
The aim of this chapter is to introduce essential features of data envelopment analysis (DEA) for regional performance measurement. We introduce basic rules of application to regional performance measurement from the viewpoint of economies of scale, treatment of input and output items, and the number of DMUs, inputs and outputs. Furthermore, in applications of DEA, we usually need to pay attention to the influence on efficiency scores by the number of DMUs, inputs and outputs. This requires an in-depth understanding, not only of the impact of the number of items or DMUs on efficiency scores but also of the influence of the quality of items on efficiency scores. This chapter focuses especially on the abovementioned critical issues; we present sensitivity analysis results of efficiency scores regarding the number of DMUs, input items and output items, based on a case study that uses input and output data on the critical energy-environment-economic (EEE) variables for a set of 47 prefectures in Japan.
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