THE EFFICIENCY OF THE HIGH‐TECH ECONOMY: CONVENTIONAL DEVELOPMENT INDEXES VERSUS A PERFORMANCE INDEX*

ABSTRACT Data Envelopment Analysis (DEA) is employed to construct an index of relative efficiencies by maximizing two proxies of high‐tech output subject to minimizing five specific resources often associated with high‐tech infrastructure. This approach ranks the 50 U.S. states from the most robustly efficient to the most robustly inefficient. The DEA approach avoids using equal or subjective weights employed in the New State Economy Index rankings. The ranking of the 50 states yields some interesting differences between some states' dominance in high‐tech industries and their economic performance.