Allocative efficiency of technically inefficient production units
We discuss how to measure allocative efficiency without presuming technical efficiency. This is relevant when it is easier to introduce reallocations than improvements of technical efficiency. We compare the approach to the traditional one of assuming technical efficiency before measuring allocative efficiency. In particular, we develop necessary and sufficient conditions on the technology to ensure consistent measures and we give dual organizational interpretations of the approaches.
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References listed on IDEAS
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- Peter Bogetoft, 1994. "Incentive Efficient Production Frontiers: An Agency Perspective on DEA," Management Science, INFORMS, vol. 40(8), pages 959-968, August.
- Peter Bogetoft, 1996. "DEA on Relaxed Convexity Assumptions," Management Science, INFORMS, vol. 42(3), pages 457-465, March.
- Peter Bogetoft & Joseph M. Tama & Jørgen Tind, 2000. "Convex Input and Output Projections of Nonconvex Production Possibility Sets," Management Science, INFORMS, vol. 46(6), pages 858-869, June.
- Niels Christian Petersen, 1990. "Data Envelopment Analysis on a Relaxed Set of Assumptions," Management Science, INFORMS, vol. 36(3), pages 305-314, March.
- Rolf Färe & Shawna Grosskopf, 2000. "Research Note. Decomposing Technical Efficiency with Care," Management Science, INFORMS, vol. 46(1), pages 167-168, January.
- Agrell, Per J. & Bogetoft, Peter & Tind, Jorgen, 2002. "Incentive plans for productive efficiency, innovation and learning," International Journal of Production Economics, Elsevier, vol. 78(1), pages 1-11, July.
- Bogetoft, Peter, 1995. "Incentives and productivity measurements," International Journal of Production Economics, Elsevier, vol. 39(1-2), pages 67-77, April.
- Peter Bogetoft, 2000. "DEA and Activity Planning under Asymmetric Information," Journal of Productivity Analysis, Springer, vol. 13(1), pages 7-48, January.
- John McDonald, 1996. "Note: A Problem with the Decomposition of Technical Inefficiency into Scale and Congestion Components," Management Science, INFORMS, vol. 42(3), pages 473-474, March.
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