1、Data Envelopment Analysis in Stata,Choonjoo Lee (sarang90kndu.ac.kr) Yong-bae Ji () Korea National Defense University, Republic of Korea Stata Conference DC09 (July 30-31, 2009),Outline,Why DEA in Stata? The Basics of DEA The Stata/DEA program Stata/DEA Examples DEA Frontiers in Stata? References,1.

2、 Why DEA in Stata?,Software Tools for Frontier Analysis,1. Why DEA in Stata? (cont.),DEA literatures by Year(2001-2009),more to go, D/B: Science Direct, EBSCO, Google scholar, *SCI, SSCI Query: DEA or Data Envelopment Analysis in title, key word, abstract,1. Why DEA in Stata? (cont.),DEA literatures

3、 by Journal(2001-2009),DEA literatures by Subject(2001-2009),1. Why DEA in Stata? (cont.), Stata is easy to use and powerful statistical software; Data Envelopment Analysis code in Stata will promote the efficiency in data management for DEA users and open new application areas in statistical infere

4、nce for Stata users.,1. Why DEA in Stata? (cont.),2. The Basics of DEA(cont.),DEA Concept,Technology + Decision Making,Inputs,Outputs,equipment,space,# type B labor,#type A customer,#type B customer,quality index,oper. profit,?,# type A labor,.,.,2. The Basics of DEA(cont.),Assumptions to analyze th

5、e black box Economic Behaviors: No input, no output! (Free) Disposability Convexity Frontier Search: Piece-wise Linear Method Scale Economy Orientation: Input-based or Output-based Analysis ,Interpretation of DEA Results X-inefficiency Rational Choice of Input-Output Mixes Performance ,2. The Basics

6、 of DEA(cont.),Terms & Notations : Input, output matrix : Row vector : Non-negativity vector : Real variable Decision Making Units(DMUs),2. The Basics of DEA(cont.),Basic DEA Models: CCR, BCC,( )* is the additional constraint in BCC model,Characteristics of DEA No assumption about Input-Output Funct

7、ion No limits to the number of inputs and outputs Not required to weight restrictions Provide reference sets for benchmarking Provide useful information for input-output mix decision n times computations for n DMUs,2. The Basics of DEA(cont.),3. The Stata/DEA program,User Written Stata/DEA Descripti

8、on Considered the basic DEA models (CCR & BCC) Can handle both input minimization and output maximization problems The data flow in the Stata/DEA program the input and output variables data sets required the DEA options define the model the “Stata/DEA” program consists of “basic” and “l(fā)p” subroutine

9、 the result data sets available for print or further analysis,3. The Stata/DEA program(cont.),Diagram of Data flow in Stata/DEA program,3. The Stata/DEA program(cont.),Stata/DEA Syntax (program code under Stata journal review) dea , data(string) iotype(string) model(string) lambda,4. Stata/DEA Examp

10、les,Example 1: Stores efficiency case(for model verification) Data: two inputs, two outputs, and 5 DMUs Data imported from Cooper et al.(2006), p.75, Table 3.7 The inputs are The number of employees (Employee) The floor area (Area) The outputs are The volume of sales (Sales) The volume of profits (P

11、rofits),4. Stata/DEA Examples(cont.),The data file including input and output variables,A user needs to set the options as required and run the following code for input orientation model dea, data(ta3_7) iotype(input) model(ccr) lambda, The input and output variables are saved in files ta3_7.csv,4.

12、Stata/DEA Examples(cont.),The Result Window,4. Stata/DEA Examples(cont.),The result file including the efficiency score and reference set, Scores match with the results of Cooper et. al.(2006).,4. Stata/DEA Examples(cont.),The result file including detail values for the efficiency score and referenc

13、e set (lambda option),4. Stata/DEA Examples(cont.),Example 2: Weapons system construction efficiency two inputs, three outputs, and 10 DMUs Data from JAA fr( Janes Armour and Artillery) The inputs are Combat weight Height The outputs are Power-to-weight ratio Max road speed Main armament diameter,4.

14、 Stata/DEA Examples(cont.),The data file including input and output variables, The input and output variables are saved in files t4_2.csv,4. Stata/DEA Examples(cont.), dea, data(t4_2) iotype(output) model(ccr) lambda,4. Stata/DEA Examples(cont.),The result file including the efficiency score and ref

15、erence set,4. Stata/DEA Examples(cont.),The result file including detail values for the efficiency score and reference set (lambda option),5. DEA Frontiers in Stata?,The Stata/DEA program is a new application in Stata. DEA is a prevalent and powerful managerial tool for measuring the performance. Th

16、e Stata/DEA program will provide Stata users with several opportunities : No extra cost to access DEA Flexible DEA model extension and development A powerful managerial tool as well as data management, statistical analysis, and optimization procedures The Stata/DEA program reports files can directly

17、 feed to other Stata routines for further analysis. Further Extensions to 2nd Stage Regression Analysis, DGP of DEA, Statistical Inferences of DEA, Case Specific DEA Models, and more are possible.,6. References,Lee, C., & Ji, Y. (2009). “Data Envelopment Analysis in Stata”, under review by the Stata Journal. Cooper, W. W., Seiford, L. M., & Tone, A. (2006). Introduction to Data Envelopment Analysis and Its Uses, Springer Science+Business Media. Charnes, A., Cooper, W. W., & Rhodes, E. (1981). Evaluating Program and Managerial Efficiency: An Application of Data Envel