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A homothetic data generated technology

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  • Peyrache, Antonio

Abstract

I propose a method for constructing an enlargement of a variable returns to scale production technology that will satisfy homotheticity. The method can be used both with DEA and FDH single output (or single input) technologies and it is computationally fast. The method is constructed by adding a restriction to the axiomatically delineated homothetic reference technologies which requires these reference technologies to be subsets of the minimal reference technology that satisfies constant returns to scale. Within this set it is possible to identify a homothetic technology that satisfies the property of minimum extrapolation.

Suggested Citation

  • Peyrache, Antonio, 2024. "A homothetic data generated technology," European Journal of Operational Research, Elsevier, vol. 316(1), pages 255-267.
    • Handle: RePEc:eee:ejores:v:316:y:2024:i:1:p:255-267
    DOI: 10.1016/j.ejor.2024.01.031
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