Far out or alone in the crowd: Classification of self-evaluators in DEA

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The units found strongly efficient in DEA studies on efficiency can be divided into self-evaluators and active peers, depending on whether the peers are referencing any inefficient units or not. The contribution of the paper starts with subdividing the self-evaluators into interior and exterior ones. The exterior self-evaluators are efficient "by default"; there is no firm evidence from observations for the classification. These units should therefore not been regarded as efficient, and be removed from the observations on efficiency scores when performing a two-stage analysis of explaining the distribution of the scores. A method for classifying self-evaluators based on the additive DEA model is developed. The application to municipal nursing- and home care services of Norway shows significant effects of removing exterior self-evaluators from the data when doing a two-stage analysis.