Data Envelopment Analysis: An Overview

Over the past decades Data Envelopment Analysis (DEA) has emerged as an important nonparametric method of evaluating performance of decision making units through benchmarking. Although developed primarily for measuring technical efficiency, DEA is now applied extensively for measuring scale efficiency, cost efficiency, and profit efficiency as well. This paper integrates the different DEA models commonly applied in empirical research with their underlying theoretical foundations in neoclassical production economics.