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A Generalized Distance Function and the Analysis of Production Efficiency

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  • Jean‐Paul Chavas
  • Thomas L. Cox

Abstract

A generalization of Shephard's distance functions is proposed, extending the usefulness of distance functions in economic analysis. Applications to efficiency measurements and productivity analysis are presented. New indexes of productivity and technical, allocative, and scale efficiency are proposed and analyzed. Interpretation of these indexes in terms of ray‐average cost, ray‐average revenue, and cost‐to‐revenue ratio is discussed.

Suggested Citation

  • Jean‐Paul Chavas & Thomas L. Cox, 1999. "A Generalized Distance Function and the Analysis of Production Efficiency," Southern Economic Journal, John Wiley & Sons, vol. 66(2), pages 294-318, October.
    • Handle: RePEc:wly:soecon:v:66:y:1999:i:2:p:294-318
    DOI: 10.1002/j.2325-8012.1999.tb00248.x
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    3. Halická, Margaréta & Trnovská, Mária & Černý, Aleš, 2024. "A unified approach to radial, hyperbolic, and directional efficiency measurement in data envelopment analysis," European Journal of Operational Research, Elsevier, vol. 312(1), pages 298-314.
    4. Barbero, Javier & Zofío, José L., 2023. "The measurement of profit, profitability, cost and revenue efficiency through data envelopment analysis: A comparison of models using BenchmarkingEconomicEfficiency.jl," Socio-Economic Planning Sciences, Elsevier, vol. 89(C).

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