Assessment of the efficiency of cities by using Data Envelopment Analysis

Efficiency aims among others to achieve with the same effort the maximum benefit. For measuring the efficiency of products and processes there are various economic models. This raises the question, whether and to which extent such models can be used to measure the efficiency of cities. In this context, the Data Envelopment Analysis (DEA), commonly used in the field of economics production, has been tested to its applicability to cities. The DEA is a nonparametric, deterministic method to measure the efficiency of economic production, in which the relative efficiency of decision units (DMU) is calculated. In the presented investigation, 116 urban municipalities in Germany were taken as DMUs of the DEA. A discussion about possible values to indicate efficiency of the cities in conjunction with first calculation tests led to a model, by which the economic and the ecological point of view is calculated separately by DEA. Hypotheses were established for both perspectives. Central assumption was: In the economic and ecological model we are looking for cities with least input of the resource "land use" and with high economic resp. ecological performance on output side. The selected input and output values are indicators to deliver an image of prospected correlations. The results allowed a ranking related to economic and ecological efficiency of cities as well as an assessment of the proportions of economic and ecological efficiency of the analyzed cities, realised with the aid of a nine-area-matrix (portfolio). The analysis showed that small and middle sized cities with low population, a medium settlement density and land productivity per unit area as well as a high ecological performance will meet the chosen efficiency criteria most likely. Based on the experience with these still very simple models, DEA appears to be an inspiring heuristic instrument for the attempt to draw near to a concept of an efficient city