Nonparametric Analysis of Technology and Productivity under Non-Convexity
This paper investigates the nonparametric analysis of technology under non-convexity. The analysis extends two approaches now commonly used in efficiency and productivity analysis: Data Envelopment Analysis (DEA) where convexity is imposed; and Free Disposal Hull (FDH) models. We argue that, while the FDH model allows for non-convexity, its representation of non-convexity is too extreme. We propose a new nonparametric model that relies on a neighborhood-based technology assessment which allows for less extreme forms of non-convexity. The distinctive feature of our approach is that it allows for non-convexity to arise in any part of the feasible set. We show how it can be implemented empirically by solving simple linear programming problems. And we illustrate the usefulness of the approach in an empirical application to the analysis of technical and scale efficiency on Korean farms.
|Date of creation:||2013|
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- Kerstens, Kristiaan & Vanden Eeckaut, Philippe, 1999.
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- Briec, Walter & Kerstens, Kristiaan & Vyen Eeckaut, Philippe, 2002. "Non-Convex Technologies and Cost Functions: Definitions, Duality and Nonparametric Tests of Convexity," Efficiency Series Papers 2002/03, University of Oviedo, Department of Economics, Oviedo Efficiency Group (OEG).
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- H. Leleu, 2009. "Mixing DEA and FDH models together," Post-Print halshs-00481985, HAL.
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- Kristof Witte & Rui Marques, 2011. "Big and beautiful? On non-parametrically measuring scale economies in non-convex technologies," Journal of Productivity Analysis, Springer, vol. 35(3), pages 213-226, June.
- Kristof De Witte & Rui C. Marcques, 2008. "Big and beautiful? On non-parametrically measuring scale economies in non-convex technologies," Working Papers Department of Economics ces0822, KU Leuven, Faculty of Economics and Business, Department of Economics.
- AGRELL, Per J. & BOGETOFT, Peter & BROCK, Michael & TIND, Jorgen, "undated". "Efficiency evaluation with convex pairs," CORE Discussion Papers RP 1828, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE). Full references (including those not matched with items on IDEAS)
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