Production Frontiers

Färe, Rolf; Grosskopf, Shawna; Lovell, C. A. Knox

doi:10.1017/cbo9780511551710

Cited by 828 publications

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“…Although Banker and Morey (1986a) is usually referred to as the main contribution to the analysis of non-discretionary variables, Koop (1981) had treated this issue previously. Fa¨re, Grosskopf and Lovell (1994) also analyze the non-discretionary variables by what they referred to as 'sub-vector optimisations'. 14.…”

Section: Resultsmentioning

confidence: 99%

Economic Efficiency and Frontier Techniques

Zamorano

2004

Journal of Economic Surveys

319

179

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Abstract. Most of the literature related to the measurement of economic efficiency has based its analysis either on parametric or on non-parametric frontier methods. The choice of estimation method has been an issue of debate, with some researchers preferring the parametric and others the non-parametric approach. The aim of this paper is to provide a critical and detailed review of both core frontier methods. In our opinion, no approach is strictly preferable to any other. Moreover, a careful consideration of their main advantages and disadvantages, of the data set utilized, and of the intrinsic characteristics of the framework under analysis will help us in the correct implementation of these techniques. Recent developments in frontier techniques and economic efficiency measurement such as Bayesian techniques, bootstrapping, duality theory and the analysis of sampling asymptotic properties are also considered in this paper.

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Section: Resultsmentioning

confidence: 99%

Economic Efficiency and Frontier Techniques

Zamorano

2004

Journal of Economic Surveys

319

179

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“…One classical example of the application of the superefficiency DEA method is the work by Lovell et al (1994). Other scholarly efforts attributed to this topic include the work by Charnes et al (1992), Fare et al (1994), Wilson (1995), Rousseau and Semple (1995), Charnes et al (1996), Thrall (1996), Zhu (1996), and Seiford and Zhu (1998 a, b). However, the subproblems for some "extreme points" (Thrall 1996) may become infeasible when the super-efficiency models are applied under other alternate returns to scale (RTS) conditions other than constant returns to scale (CRS) (e.g., variable returns to scale or VRS).…”

Section: Introductionmentioning

confidence: 99%

Note: Ranking DMUs with Infeasible Super-Efficiency DEA Models

2002

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I t has been suggested in the data envelopment analysis (DEA) literature that it is impossible to obtain a full ranking of decision-making units (DMUs) when infeasible subproblems arise in the so-called super-efficiency DEA models under different returns to scale (RTS) assumptions other than constant returns to scale (CRS) and consequently the application of the super-efficiency DEA models under different RTS conditions other than CRS should be restricted. The implications of the infeasibility in super-efficiency DEA models with respect to the efficiency ranking of the DMUs is explored. Based on the analysis, we show that it is still possible to obtain the full ranking of the entire observation set when infeasibilities arise in super-efficiency DEA models.

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“…The cost rationalizing effect of joint input use for multi-output firms is evident. For instance, as for our own empirical application, senior researchers can serve as an input in the production of both 1 See, e.g., Varian (1984), Färe et al (1994) and Cooper et al (2000) for introductory texts on nonparametric production and efficiency analysis. 2 See, e.g., the "subset rationalization" concept of Banker and Maindiratta (1988) and the "goodness-of-fit" concept of Varian (1990), which essentially reconcile the neoclassical nonparametric production analysis literature (see, e.g., Afriat, 1972;Hanoch and Rothschild, 1972;and Varian, 1984) and the 'DWD (QYHORSPHQW $QDO\VLV (DEA) literature.…”

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confidence: 99%

Analyzing Cost-Efficient Production Behavior Under Economies of Scope: A Nonparametric Methodology

Cherchye

Rock

Vermeulen

2008

Operations Research

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Standard-Nutzungsbedingungen:Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Zwecken und zum Privatgebrauch gespeichert und kopiert werden.Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich machen, vertreiben oder anderweitig nutzen.Sofern die Verfasser die Dokumente unter Open-Content-Lizenzen (insbesondere CC-Lizenzen) zur Verfügung gestellt haben sollten, gelten abweichend von diesen Nutzungsbedingungen die in der dort genannten Lizenz gewährten Nutzungsrechte. The Institute for the Study of Labor (IZA) in Bonn is a local and virtual international research center and a place of communication between science, politics and business. IZA is an independent nonprofit company supported by Deutsche Post World Net. The center is associated with the University of Bonn and offers a stimulating research environment through its research networks, research support, and visitors and doctoral programs. IZA engages in (i) original and internationally competitive research in all fields of labor economics, (ii) development of policy concepts, and (iii) dissemination of research results and concepts to the interested public. Terms of use: Documents in EconStor may D I S C U S S I O N P A P E R S E R I E SIZA Discussion Papers often represent preliminary work and are circulated to encourage discussion.Citation of such a paper should account for its provisional character. A revised version may be available directly from the author. ABSTRACT Analyzing Cost Efficient Production Behavior Under Economies of Scope: A Nonparametric Methodology *In designing a production model for firms that generate multiple outputs, we take as a starting point that such multi-output production refers to economies of scope, which in turn originate from joint input use and input externalities. We provide a nonparametric characterization of cost efficient behavior under these conditions, and subsequently institute necessary and sufficient conditions for data consistency with such efficient behavior that only include observed firm demand and supply data. We illustrate our methodology by examining the cost efficiency of research programs in Economics and Business Management faculties of Dutch universities. This application shows that the proposed methodology may entail robust conclusions regarding cost efficiency differences between universities within specific specialization areas, even when using shadow prices to evaluate the different inputs. ,QWURGXFWLRQWe present a novel approach for analyzing the cost efficiency of multi-output firms. Our starting point is that such multi-output production is essentially induced by the presence of economies of scope, which may loosely be defined as "situations where the average total cost of production decreases as a result of increasing the number of different goods produced" (see, e.g., Baumol et al., 1982). Given this, we stress that we do not want to present a methodology for investigating the extent to which eco...

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Production Frontiers

Cited by 828 publications

References 0 publications

Economic Efficiency and Frontier Techniques

Economic Efficiency and Frontier Techniques

Note: Ranking DMUs with Infeasible Super-Efficiency DEA Models

Analyzing Cost-Efficient Production Behavior Under Economies of Scope: A Nonparametric Methodology

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