This study estimates poverty and inequality trends using Data Envelopment Analysis (DEA) and panel data in Colombia during the sample period between 1993 and 2007. In this analysis, we suggest a DEA model to measure and rank poverty, inequality and development trends. The results from the DEA model show variation in the scores across Colombian departments during the sample period. A second-stage panel data analysis with fixed effects reveals that departments with higher population density, unemployment, homicide rates and property concentration have a lower efficiency score, whereas departments with higher health and education coverage and public investments have better results according to DEA and panel data estimations. Findings of this analysis demonstrate that the decrease in poverty and inequality could be achieved through adequate strategies that guarantee development and economic growth with policies concentrated to improve social welfare.