Identifying subareas that comprise a greater metropolitan area: The criterion of county relative efficiency

Data Envelopment Analysis (DEA) is used to rank the relative efficiency of thirty-two counties comprising the Greater Minneapolis-St, Paul Metropolitan Region and finds that the greatest external economies originate in the urban core and decline toward the periphery. By employing 1993 IMPLAN input-output database and county estimates of final payments (inputs) and final demands (outputs), DEA classifies efficient and inefficient counties that produce maximum output using minimum input, and a sensitivity analysis ranks counties according to robustness of the efficiency classifications. Efficiency differences between three groups identify the metropolitan core, transitional region, and peripheral region. Dominant industries in the three regions are identified and contrasted using location quotients. This study adopts the various analytical techniques into an urban regional systems approach for policy analysis and implementation.