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Tangency capacity notions based upon the profit and cost functions: A non-parametric approach and a general comparison

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  • Briec, Walter
  • Kerstens, Kristiaan
  • Prior, Diego
  • Van de Woestyne, Ignace

Abstract

This contribution provides a way to define and compute a tangency notion of economic capacity based upon the relation between the various directional distance functions and the profit and cost functions using non-parametric technologies. A new result relating profit and cost function-based tangency capacity notions is established.

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Bibliographic Info

Article provided by Elsevier in its journal Economic Modelling.

Volume (Year): 27 (2010)
Issue (Month): 5 (September)
Pages: 1156-1166

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Handle: RePEc:eee:ecmode:v:27:y:2010:i:5:p:1156-1166

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Web page: http://www.elsevier.com/locate/inca/30411

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Keywords: Economic capacity Profit function Cost function Directional distance function Tangency;

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Citations

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Cited by:
  1. Bruno De Borger & Kristiaan Kerstens & Diego Prior & Ignace Van de Woestyne, 2012. "Static efficiency decompositions and capacity utilization: integrating economic and technical capacity notions," Applied Economics, Taylor & Francis Journals, vol. 44(31), pages 4125-4141, November.
  2. De Borger, Bruno & Kerstens, Kristiaan & Prior, Diego & Van de Woestyne, Ignace, 2009. "Static Efficiency Decompositions and Capacity Utilisation: Integrating Economic and Technical Capacity Notions. Technical Appendix," Working Papers 2009/31, Hogeschool-Universiteit Brussel, Faculteit Economie en Management.

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