Dealing the problem of heteroscedasticity in Data Envelopment Analysis
DOI:
https://doi.org/10.31305/rrijm.2023.v08.n07.021Keywords:
Data Envelopment Analysis (DEA), Decision Making units (DMU), heteroscedasticity, EfficiencyAbstract
There are various performance or efficiency measurements of similar type of organizations known as Decision Making Units (DMU). One of the effective tools for assessing the effectiveness of DMUs is the non-parametric Data Envelopment Analysis (DEA) approach. However, the presence of heteroscedasticity in the inputs and outputs affect the results of DEA. By computing the efficiency estimates in this work, the author tried to eliminate the heteroscedasticity. Additionally, for the sake of an empirical inquiry, the author took into account information on non-life insurance businesses in India. The study's goal is to determine how heteroscedasticity affects DEA efficiency estimations.
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This is an open access article under the CC BY-NC-ND license Creative Commons Attribution-Noncommercial 4.0 International (CC BY-NC 4.0).
