The Measurement Of Efficiency Where There Are Multiple Outputs
This paper is motivated by the empirical observation that in many studies the elasticity of output with respect to labour is often negative and/or insignificant. The present study applies multiple output models to estimate the technical efficiency of enterprises in the international electricity, gas and telecom-munications industries. The results support the contention that single output production models may yield misleading results in respect of the elasticities of inputs such as labour. The results also suggest that relatively simple DEA and ordinary least squares models may be preferred to more complex stochastic frontier models in estimating the technical efficiency of enterprises.
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- Aigner, Dennis & Lovell, C. A. Knox & Schmidt, Peter, 1977. "Formulation and estimation of stochastic frontier production function models," Journal of Econometrics, Elsevier, vol. 6(1), pages 21-37, July.
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- Charnes, A. & Cooper, W. W. & Rhodes, E., 1978. "Measuring the efficiency of decision making units," European Journal of Operational Research, Elsevier, vol. 2(6), pages 429-444, November.
- Greene, William H., 1980. "Maximum likelihood estimation of econometric frontier functions," Journal of Econometrics, Elsevier, vol. 13(1), pages 27-56, May.
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