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FDH Directional Distance Functions with an Application to European Commercial Banks

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  • Laurens Cherchye
  • Timo Kuosmanen
  • Thierry Post

Abstract

Weextend Free Disposable Hull (FDH) efficiency analysis towardsthe general directional distance function framework. The profitinterpretation of directional distance functions is extendedto the non-convex FDH technologies. In addition, we derive anefficient enumerative algorithm for computing distance measuresin Free Disposable Hull (FDH) technologies, which applies tothe entire (infinitely large) family of directional distancefunctions. A simple numerical example and an application to Europeancommercial banks illustrate the algorithm. Copyright Kluwer Academic Publishers 2001

Suggested Citation

  • Laurens Cherchye & Timo Kuosmanen & Thierry Post, 2001. "FDH Directional Distance Functions with an Application to European Commercial Banks," Journal of Productivity Analysis, Springer, vol. 15(3), pages 201-215, January.
    • Handle: RePEc:kap:jproda:v:15:y:2001:i:3:p:201-215
    DOI: 10.1023/A:1011176325187
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