Firm and industry level profit efficiency analysis using absolute and uniform shadow prices

Kuosmanen, Timo; Kortelainen, Mika; Sipiläinen, Timo; Cherchye, Laurens

doi:10.1016/j.ejor.2009.06.002

Cited by 42 publications

(12 citation statements)

References 36 publications

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“…Mean of the technical efficiency was recorded as to vary across the area; the most technically efficient area was considered in central region. Kuosmanen et al (2010) conducted the study on profit efficiency at the industry levels by excluding the price information completely. Two new suggestions were made.…”

Section: Review Of Literaturementioning

confidence: 99%

Price Fluctuations of Rice Crop in District Sheikhupura

Qamar¹,

Younas²,

Waseem

2019

JAS

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This research was done to explore the trends by using variables basmati prices, area in which rice were sown, coarse varieties area, coarse varieties’ area and coarse varieties prices respectively to estimate the yield and productivity of basmati rice. According to the results of three models it was estimated that the price of basmati prices had a positive and significant effect on yield. The probability value showed the positive and significant effect on yield. Similarly, the area in which basmati sown had both significant and insignificant effect; the probability value of area sown in second models suggested the insignificant effect on yield. Another variable coarse variety area had a positive and significant effect on yield on all the three models that means this variable positively and significantly affecting the yield of basmati over the selected time. The variable of coarse varieties prices also had significant and insignificant effect, according to the probability value of this variable in third model the effect is positive but insignificant but other remaining two models are positive and significant. The last variable used i.e. coarse varieties prices had also positive and significant effect in all the three models, so it was estimated that this variable is positively affecting the yield of basmati rice. The Durbin Watson results showed that in first two models there is no autocorrelation because the value is in between 1.7 to 2.3 but in third model the value of Durbin Watson is not in the limit so it had autocorrelation among variables.

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Section: Review Of Literaturementioning

confidence: 99%

Price Fluctuations of Rice Crop in District Sheikhupura

Qamar¹,

Younas²,

Waseem

2019

JAS

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“…Russell (1985) or Leleu (2013)). Several authors have used this approach to model economic efficiency, such as Camanho and Dyson (2005), Cherchye et al (2002) or Kuosmanen et al (2010), where price uncertainty has been modelled through constraints imposed on the shadow prices in model (2). (2) is specified in 'price space' and shadow prices are the decision variables to this model.…”

Section: Economic Efficiency In Non-competitive Marketsmentioning

confidence: 99%

Economic efficiency when prices are not fixed: disentangling quantity and price efficiency

Portela

Thanassoulis

2014

Omega

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This paper proposes an approach to compute and decompose cost efficiency in contexts where units can adjust input quantities and seek input prices so that through the joint determination of quantities and prices they can minimise the aggregate cost of the outputs they secure. The models developed are based on the data envelopment analysis framework and can accommodate situations where the degree of influence over prices is minimal, and situations where there is a large influence over prices. When units cannot influence input prices the models proposed reduce to the standard cost efficiency, where prices are taken as exogenous. In addition to the cost model, we introduce a novel decomposition of cost efficiency into a quantity and a price component, based on Bennet indicators. The components are expressed in terms of percentage cost savings that can be attained through changing prices and changing quantities towards the overall optimum cost target.

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“…The nonparametric estimation of profit inefficiency can rely on the same wellestablished theoretical principles and axioms (Banker and Maindiratta, 1988;Färe and Grosskopf, 1995). In the recent years, the measurement and analysis of profit efficiency has attracted increasing attention in the operational research literature (Kuosmanen et al, 2010).…”

Section: Introductionmentioning

confidence: 99%

An investigation of cost, revenue and profit efficiency: The case of Iranian companies

Mahdavi¹

2012

Afr. J. Bus. Manage.

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Using data envelopment analysis technique, this research firstly investigated cost, revenue and profit efficiency of automobile and parts industry of companies listed in Tehran stock exchange during the years 2006 to 2009. Secondly, it explored potential relationships between a few variables including size, operating costs, profitability, asset turnover ratio and different efficiency measures calculated in the first stage. The empirical results indicated that average cost, revenue and profit efficiency of surveyed companies over the given period were 0.51, 0.57 and 0.27, respectively. In this context, inefficient companies, using efficiency frontier concept and considering benchmark units, could approach efficient levels, as it was treated in this paper. Moreover, the findings arrived from exploring potential determinants of efficiency revealed that there was a significant positive relationship between return on equity, sales to fixed assets and cost efficiency between sales to fixed assets, log. total assets, sales to total assets and revenue efficiency and finally between sales to fixed assets, log. total assets and profit efficiency. These results implied that the more a company was large, the more it was revenue and profit efficient. Also, they highlight effective role of fixed assets in firms operations and generating profits.

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Firm and industry level profit efficiency analysis using absolute and uniform shadow prices

Cited by 42 publications

References 36 publications

Price Fluctuations of Rice Crop in District Sheikhupura

Price Fluctuations of Rice Crop in District Sheikhupura

Economic efficiency when prices are not fixed: disentangling quantity and price efficiency

An investigation of cost, revenue and profit efficiency: The case of Iranian companies

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