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Data envelopment analysis (DEA) is a method for assessing the comparative efficiencies of decision making units (e.g., banks and schools) by relating their output to their input levels. Restrictions are often imposed in these assessments to reflect prior judgments on the values of input and/or output variables. This paper introduces a new approach to capturing and using value judgments in DEA, based on unobserved Decision Making Units. In so doing, it opens up a whole new approach for reflecting value judgments in DEA assessments, which can offer advantages in certain situations.Data Envelopment Analysis, Weights Restrictions, Comparative Efficiency, Value Judgments, Unobserved Decision Making Units

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This paper provides a review of the evolution, development and future research directions on the use of weights restrictions and value judgements in Data Envelopment Analysis. The paper argues that the incorporation of value judgements in DEA was motivated by applications of the method in real life organisations. The application driven development of the methods has led to a number of different approaches in the literature which have inevitably different uses and interpretations. The paper concentrates on the implications of weights restrictions on the efficiency, targets and peer comparators of inefficient Decision Making Units. The paper concludes with future research directions in the area of value judgements and weights restrictions.