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The Measurement Of Efficiency Where There Are Multiple Outputs

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Author Info
John L. Whiteman
Abstract

This paper is motivated by the empirical observation that in many studies the elasticity of output with respect to labour is often negative and/or insignificant. The present study applies multiple output models to estimate the technical efficiency of enterprises in the international electricity, gas and telecom-munications industries. The results support the contention that single output production models may yield misleading results in respect of the elasticities of inputs such as labour. The results also suggest that relatively simple DEA and ordinary least squares models may be preferred to more complex stochastic frontier models in estimating the technical efficiency of enterprises.

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File URL: http://www.monash.edu.au/policy/ftp/workpapr/g-134.pdf
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Paper provided by Monash University, Centre of Policy Studies/IMPACT Centre in its series Centre of Policy Studies/IMPACT Centre Working Papers with number g-134.

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Date of creation: Nov 1999
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Handle: RePEc:cop:wpaper:g-134

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Related research
Keywords: multiple output; data envelopment analysis; stochastic production frontier; distance function; ray frontier; technical efficiency;

Find related papers by JEL classification:
D24 - Microeconomics - - Production and Organizations - - - Production; Capital and Total Factor Productivity; Capacity
L94 - Industrial Organization - - Industry Studies: Transportation and Utilities - - - Electric Utilities
L95 - Industrial Organization - - Industry Studies: Transportation and Utilities - - - Gas Utilities; Pipelines; Water Utilities
L96 - Industrial Organization - - Industry Studies: Transportation and Utilities - - - Telecommunications

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  1. Quiggin, J., 1995. "Estimating the Benefits of Hilmer and Related Reforms," CEPR Discussion Papers 338, Centre for Economic Policy Research, Research School of Social Sciences, Australian National University.
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  2. John Whiteman, 1999. "The Potential Benefits of Hilmer and Related Reforms: Electricity Supply," Australian Economic Review, The University of Melbourne, Melbourne Institute of Applied Economic and Social Research, vol. 32(1), pages 17-30. [Downloadable!] (restricted)
  3. Löthgren, Mickael, 1997. "A Multiple Output Stochastic Ray Frontier Production Model," Working Paper Series in Economics and Finance 158, Stockholm School of Economics.
  4. Aigner, Dennis & Lovell, C. A. Knox & Schmidt, Peter, 1977. "Formulation and estimation of stochastic frontier production function models," Journal of Econometrics, Elsevier, vol. 6(1), pages 21-37, July. [Downloadable!] (restricted)
  5. Battese, George E. & Coelli, Tim J., 1988. "Prediction of firm-level technical efficiencies with a generalized frontier production function and panel data," Journal of Econometrics, Elsevier, vol. 38(3), pages 387-399, July. [Downloadable!] (restricted)
  6. Greene, William H., 1980. "Maximum likelihood estimation of econometric frontier functions," Journal of Econometrics, Elsevier, vol. 13(1), pages 27-56, May. [Downloadable!] (restricted)
  7. Charnes, A. & Cooper, W. W. & Rhodes, E., 1978. "Measuring the efficiency of decision making units," European Journal of Operational Research, Elsevier, vol. 2(6), pages 429-444, November. [Downloadable!] (restricted)
  8. Tim Coelli & Sergio Perelman, 2000. "Efficiency measurement, multiple-output technologiess and distance functions : with application to European Railways," CREPP Working Papers 9605, Centre de Recherche en Economie Publique et de la Population (CREPP) (Research Center on Public and Population Economics) HEC-Management School, University of Liège. [Downloadable!]
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