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Measuring technical efficiency under variable returns to scale using Debreu's loss function

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  • Díaz-Hernández, Juan José
  • Cova-Alonso, David-José
  • Martínez-Budría, Eduardo

Abstract

This paper proposes a model that makes two contributions to the measurement of technical efficiency under a technology with variable returns to scale. First, the criteria for identifying an optimal benchmark are not limited to technical dominance and Pareto efficiency, but also include maximum average productivity, defined as the ratio between a weighted linear aggregate of outputs and inputs.

Suggested Citation

  • Díaz-Hernández, Juan José & Cova-Alonso, David-José & Martínez-Budría, Eduardo, 2025. "Measuring technical efficiency under variable returns to scale using Debreu's loss function," European Journal of Operational Research, Elsevier, vol. 323(3), pages 975-987.
    • Handle: RePEc:eee:ejores:v:323:y:2025:i:3:p:975-987
    DOI: 10.1016/j.ejor.2024.12.050
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