Data Envelopment Analysis (DEA) is a powerful, non-parametric technique that allows the comparison of diverse decision-making units (DMUs) and provides a summary measure of performance for each agency. Due to the special circumstances faced by public agencies, this mathematical programming technique is particularly suited for the assessment of public sector performance. Public agencies have multiple and frequently conflicting objectives, and difficult-to-price inputs and outputs. Also, public agencies operate in diverse environments with different service area characteristics and constraints. Other techniques that have been employed in the past include comparison of agency performance with the average agency. DEA is distinguished by the fact that it creates a best practice frontier and evaluates the performance of each agency against that frontier. This paper discusses the potential for DEA to make significant contributions to the evaluation of public sector investments in ITS technologies.
ASJC Scopus subject areas
- Economics, Econometrics and Finance (miscellaneous)