Valuing Community Attributes in Rural Counties of West Virginia Using Data Envelopment Analysis

Abstract

As quality of life measures are related to increased economic activity, it becomes increasingly important to develop indicators as accurate measures of the well-being of the residents in a community. This study use Data Envelopment Analysis (DEA) to analyze community attributes of rural counties in West Virginia using variables determining quality of life. County level data is used to identify counties that are inefficient as measured in terms of socioeconomic factors. Desirable community attributes such as employment, median household income, median house value, health index, number of personal care establishments, and number of high school graduates were used as output variables. Input variables representing the undesirable characteristics of counties include population density, unemployment rate, per capita tax, number of persons below poverty, and crime rate. The analysis seeks to determine efficiency levels in the rural areas of the State. The results show that majority of the rural counties in the State lie on the efficiency frontier, while others are classified to be inefficient. The research findings that can be used as indicators of community performance and to evaluate counties in terms of creating quality of life are of interest to policy makers. Keywords: data envelopment analysis, community attributes, output variables, input variables, efficiency levels, quality of life, principal components analysis