Raymond L. Raab

Identifying Subareas That Comprise A Greater Metropolitan Area: The Criterion of County Relative Efficiency

Data Envelopment Analysis (DEA) is used to rank the relative efficiency of thirty–two counties comprising the Greater Minneapolis–St. Paul Metropolitan Region and finds that the greatest external economies originate in the urban core and decline toward the periphery. By employing 1993 IMPLAN input–output database and county estimates of final payments (inputs) and final demands (outputs), DEA classifies efficient and inefficient counties that produce maximum output using minimum input, and a sensitivity analysis ranks counties according to robustness of the efficiency classifications. Efficiency differences between three groups identify the metropolitan core, transitional region, and peripheral region. Dominant industries in the three regions are identified and contrasted using location quotients. This study adopts the various analytical techniques into an urban regional systems approach for policy analysis and implementation.

FINANCIAL STATEMENT ANALYSIS: A Data Envelopment Analysis Approach

Ratio analysis is a commonly used analytical tool for verifying the performance of a firm. While ratios are easy to compute, which in part explains their wide appeal, their interpretation is problematic, especially when two or more ratios provide conflicting signals. Indeed, ratio analysis is often criticized on the grounds of subjectivity, that is the analyst must pick and choose ratios in order to assess the overall performance of a firm.In this paper we demonstrate that Data Envelopment Analysis (DEA) can augment the traditional ratio analysis. DEA can provide a consistent and reliable measure of managerial or operational efficiency of a firm. We test the null hypothesis that there is no relationship between DEA and traditional accounting ratios as measures of performance of a firm. Our results reject the null hypothesis indicating that DEA can provide information to analysts that is additional to that provided by traditional ratio analysis. We also apply DEA to the oil and gas industry to demonstrate how financial analysts can employ DEA as a complement to ratio analysis.

Efficiency and perceived quality of the nation's “top 25” National Universities and National Liberal Arts Colleges: An application of data envelopment analysis to higher education

Abstract Data envelopment analysis (DEA) is used to measure the relative efficiency of the “best” 25 U.S. News and World Report-ranked universities. Our results indicate how DEA may be used to measure relative efficiency of these higher education institutions from commonly available “performance indicators.” It is apparent that the quality ranking of U.S. News bears an inverse relationship to a ranking implied by the narrow production efficiency criterion of DEA. Improvements in technical efficiency of a “demonstration” university are examined by readjusting the particular input indicators.

Global warming and environmental production efficiency ranking of the Kyoto Protocol nations

This paper analyzes the United Nations Organizations Kyoto Protocol nations to address two questions. First, what are the environmental production efficiency rankings of these nations? Second, is there a relationship between a nations ratification status and its environmental production efficiency ranking? Our findings suggest that the nations that have ratified the Kyoto Protocol are more likely to be environmentally production efficient as compared to the nations that have not ratified the Protocol.

Efficient provision of child quality of life in less developed countries: conventional development indexes versus a programming approach to development indexes

Abstract Using a linear programming approach, we establish a child quality of life (CQL) index by evaluating the ability of a less developed country (LDC) to maximize specific child development goals subject to minimizing specific resource availability indicators. This approach — which ranks LDCs from the most robustly efficient to the most robustly in efficient in their ability to maximize goals while minimizing resource utilization — avoids using equal or subjective weights employed in conventional ranking schemes. The ranking of the 38 LDCs yields unexpected results and suggests a very different way of measuring and evaluating development policy.

Performance Measurement for Accountability in Corporate Governance: A Data Envelopment Analysis Approach

Purpose - The purpose of this paper is to show the applicability of data envelopment analysis (DEA) in arriving at an unbiased account of relative performance in a set of companies, using the pharmaceutical industry as an example. Design/methodology/approach - A DEA-based income efficiency measure of business performance for the pharmaceutical industry is computed. The pharmaceutical industry, which includes many multinational corporations with complex governance problems, and the strategies that allowed firm efficiency rankings to change over time, over ten recent years, are analyzed. Findings - The analyses indicate that the inclines and declines in DEA efficiency rankings are related to the strategic choices made by the upper management. Research limitations/implications - The paper attempted to trace firm behavior Practical implications - The approach may be ideal to evaluate strategic managers (CEOs, general managers, and presidents) by board of directors, since it relates multiple performance indices to a meta-measure of performance. Another group of beneficiaries include sector financial analysts. The approach adds a new dimension to sector analysis, to compare specific industries and identify the relative rankings of firms on multiple performance indices. Originality/value - The paper demonstrates the usefulness of DEA in performance governance measurement by applying it to the pharmaceuticals industry.

An Income Efficiency Model Approach to the Economic Consequences of Osha Cotton Dust Regulation

This paper used Data Envelopment Analysis IDEA) to test the economic consequences of the Occupational Health and Safety Administration (OSHA) cotton dust standards by comparing the relative efficiency of firms affected by cotton dust in SIC 2200 and 2300 for the years before and after the Supreme Court upheld the regulation in 1981. Accounting-based inputs of common equity, total assets and production costs were minimized, while total revenue was maximized. Using available Compustat firms, we found that the surviving firms under stiff foreign competition had become more efficient during the post-regulatory period as predicted. The results indicate the usefulness of DEA as an alternative method of testing the economic consequences of a regulation.