Study on DEA method of multiple environmental character variable (ECV) grouping in DMU environment heterogeneity situation

Classical DEA assumes DMU to be homogeneous, but in fact, some researchers found that DMU always had heterogeneous character, which would result in bias of relative efficiency scores and influence discrimination power of DEA. Environment heterogeneity is one characteristic manifestation of DMU heterogeneity. With retrospect to DEA method on DMU environment heterogeneity and focus on defect of the frontier separation approach, this paper discusses DEA method of multiple environmental character variable (ECV in short) grouping and demonstrates the method regarding China road freight transportation industry (CRFTI in short), and compares the result to the classical DEA method, not considering environment heterogeneity to confirm the discrimination power. The author wishes to provide some revelation to DEA method research in DMU environment heterogeneity situation.