Using data envelopment analysis to measure the efficiency of non-profit organizations: A critical evaluation

This study examines the potential effects of variable set expansion and data variations upon the efficiency scores generated using the Data Envelopment Analysis (DEA) model. It was found that variable set expansion (either through disaggregation of existing variables or addition of new factors) should produce an upward trend in efficiency scores. In addition, ample opportunity exists for ‘decision-making units’ to increase their efficiency scores through manipulation of reported data. In real-world applications of DEA, these problems must be resolved as much as possible (e.g. increased audit of data) in order to improve DEA's practical usefulness and reliability.