Maintaining the Regular Ultra Passum Law in data envelopment analysis
AbstractThe variable returns to scale data envelopment analysis (DEA) model is developed with a maintained hypothesis of convexity in input-output space. This hypothesis is not consistent with standard microeconomic production theory that posits an S-shape for the production frontier, i.e. for production technologies that obey the Regular Ultra Passum Law. Consequently, measures of technical efficiency assuming convexity are biased downward. In this paper, we provide a more general DEA model that allows the S-shape.
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Bibliographic InfoPaper provided by Department of Business and Economics, University of Southern Denmark in its series Discussion Papers of Business and Economics with number 2/2012.
Length: 22 pages
Date of creation: 04 Jan 2012
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Data envelopment analysis; homothetic production; S-shaped production function; non-convex production set;
Find related papers by JEL classification:
- C00 - Mathematical and Quantitative Methods - - General - - - General
- C40 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods: Special Topics - - - General
- C60 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - General
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