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Generalized theory for measuring efficiency of individuals and groups

Author

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  • Valentin Zelenyuk

    ((CEPA) at The University of Queensland, Australia)

  • Valentyn Panchenko

    (University of New South Wales)

Abstract

We present a cohesive generalized framework for an aggregation of the Nerlovian profit indicators and of the directional distance functions, frequently used in productivity and efficiency analysis in operations research and econometrics (e.g., via data envelopment analysis or stochastic frontier analysis). Our theoretical framework allows for greater flexibility than previous approaches, and embraces many other approaches as special cases. In the proposed aggregation scheme, the aggregation weights are mathematically derived from assumptions made about the optimization behavior and about the chosen directions of measurement. We also discuss various interesting special cases of popular directions, including the case of Debreu-Farrell-type efficiency.

Suggested Citation

  • Valentin Zelenyuk & Valentyn Panchenko, 2024. "Generalized theory for measuring efficiency of individuals and groups," Annals of Operations Research, Springer, vol. 332(1), pages 781-806, January.
    • Handle: RePEc:spr:annopr:v:332:y:2024:i:1:d:10.1007_s10479-023-05599-6
    DOI: 10.1007/s10479-023-05599-6
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    References listed on IDEAS

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    More about this item

    Keywords

    Efficiency; Productivity; Aggregation; Data envelopment analysis;
    All these keywords.

    JEL classification:

    • D24 - Microeconomics - - Production and Organizations - - - Production; Cost; Capital; Capital, Total Factor, and Multifactor Productivity; Capacity
    • O4 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity

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