Random effects logistic regression model for ranking efficiency in data envelopment analysis

Ranking efficiency based on DEA results can be used for grouping DMUs. The resulting group membership can be partly related to environmental characteristics of DMU, which are not used either as input or output. Utilizing the expert knowledge on super efficiency DEA results, we propose a multinomial Dirichlet regression model which can be used for the purpose of selection of new projects. A case study is presented in the context of ranking analysis of new information technology commercialization projects. It is expected that our proposed approach can complement the DEA ranking results with environmental factors and at the same time it facilitates the prediction of efficiency of new DMUs with only given environmental characteristics.