Calculating the scale elasticity in DEA models
AbstractIn economics scale properties of a production function is charcterised by the value of the scale elasticity. In the field of efficiency studies this is also a valid approach for the frontier production function. It has no good meaning to talk about scale properties of inefficient observations. In the DEA literature a qualitative characterisation is most common. The contribution of the paper is to apply the concept of scale elasticity from multi output production theory in economics to the piecewise linear frontier production function, and to develop formulas for calculating values of the scale elasticity for radial projections of inefficient observations. Illustrations also on real data are provided, showing the differences between scale elasticity values for the input- and output oriented projections and the range of values for efficient observations.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
Bibliographic InfoPaper provided by ICER - International Centre for Economic Research in its series ICER Working Papers with number 28-2002.
Length: 34 pages
Date of creation: Jun 2002
Date of revision:
Scale elasticity; DEA; production theory; Farrell efficiency measures;
Find related papers by JEL classification:
- C61 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - Optimization Techniques; Programming Models; Dynamic Analysis
- D24 - Microeconomics - - Production and Organizations - - - Production; Cost; Capital; Capital, Total Factor, and Multifactor Productivity; Capacity
This paper has been announced in the following NEP Reports:
- NEP-EFF-2003-07-29 (Efficiency & Productivity)
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Banker, Rajiv D. & Thrall, R. M., 1992. "Estimation of returns to scale using data envelopment analysis," European Journal of Operational Research, Elsevier, vol. 62(1), pages 74-84, October.
- Banker, Rajiv D. & Chang, Hsihui & Cooper, William W., 1996. "Equivalence and implementation of alternative methods for determining returns to scale in data envelopment analysis," European Journal of Operational Research, Elsevier, vol. 89(3), pages 473-481, March.
- Banker, R. D. & Bardhan, I. & Cooper, W. W., 1996. "A note on returns to scale in DEA," European Journal of Operational Research, Elsevier, vol. 88(3), pages 583-585, February.
- Afriat, Sidney N, 1972. "Efficiency Estimation of Production Function," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 13(3), pages 568-98, October.
- Svetlov, Nikolai M., 2007. "Corporate farm size determinants in transitional economy: the case of the Moscow region," 102nd Seminar, May 17-18, 2007, Moscow, Russia 10017, European Association of Agricultural Economists.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Alessandra Calosso).
If references are entirely missing, you can add them using this form.