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Productive Efficiency Analysis with Incomplete Output Information

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Listed:
  • Laurens Cherchye
  • Bram De Rock
  • Dieter Saelens
  • Marijn Verschelde

Abstract

We present a novel DEA-type method to evaluate the productive efficiency of DMUs when the empirical analyst has incomplete output information. Our method builds on the Afriat Theorem that was originally proposed in the context of consumer analysis. We translate this result to a production setting and show that it provides a productive basis for cost efficiency analysis in the absence of output information. Our method is versatile in that it can accommodate a continuum of instances characterized by incomplete information on output quantities. We illustrate its practical usefulnessthrough an empirical application that evaluates the productive efficiency performance of countries.

Suggested Citation

  • Laurens Cherchye & Bram De Rock & Dieter Saelens & Marijn Verschelde, 2022. "Productive Efficiency Analysis with Incomplete Output Information," Working Papers ECARES 2022-21, ULB -- Universite Libre de Bruxelles.
    • Handle: RePEc:eca:wpaper:2013/345028
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    References listed on IDEAS

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    Keywords

    efficiency measurement; nonparametric production analysis; incomplete output information; Afriat Theorem;
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