Question 1

How many DMUs does DEA need for stable results?

Accepted Answer

DEA suffers from the "curse of dimensionality" — more indicators create more efficient DMUs. Generally, DMU count should be at least 2x the total number of input-output indicators.

Question 2

DEA or SFA — which is better for my research?

Accepted Answer

DEA is non-parametric, suitable for multi-input multi-output scenarios; SFA is parametric, suitable for single-output with high-quality data. Management research with multiple inputs/outputs typically prefers DEA.

Question 3

What does an efficiency score of 0.8 mean?

Accepted Answer

Efficiency scores range from 0 to 1. A score of 1 indicates the DMU is on the efficiency frontier; a score of 0.8 means the DMU operates at 80% of the best practice efficiency.

DEA Data Envelopment Analysis Guide | CCR/BCC/SBM Models for Efficiency Research

Page Summary