Overcoming data limitations in nonparametric benchmarking : applying PCA-DEA to natural gas transmission

Maria Nieswand, Astrid Cullmann, Anne Neumann

We empirically demonstrate a practical approach of efficiency evaluation with limited data availability in some regulated industries. We apply PCA-DEA for radial efficiency measurement to U.S. natural gas transmission companies in 2007. PCA-DEA reduces dimensions of the optimization problem while maintaining most of the variation in the original data. Our results suggest that the methodology reduces the probability of over-estimation of individual firm-specific performance.

MoreLess

Year of publication:	2010
Authors:	Nieswand, Maria ; Cullmann, Astrid ; Neumann, Anne
Publisher:	[Kiel : ZBW
Subject:	Efficiency Analysis \| PCA-DEA \| Network Regulation \| Natural Gas Transmission \| Gasversorgung \| Gas supply \| Regulierung \| Regulation \| Technische Effizienz \| Technical efficiency \| Data-Envelopment-Analyse \| Data envelopment analysis \| Schätzung \| Estimation \| Hauptkomponentenanalyse \| Principal component analysis \| Effizienz \| Efficiency