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Product Mixes as Objects of Choice in Nonparametric Efficiency Measurement

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  • Laurens CHERCHYE
  • Tom VAN PUYENBROECK

Abstract

Non-radial measures of technical efficiency essentially differ from their radial counterparts in that the product mix of the efficient reference is allowed to be different from the product mix of the evaluated observation. Whereas existing non-radial measures are still based on the product mix of the evaluated, i.e. possibly inefficient observation, we change the perspective and propose a measure based on the mix properties of the efficient reference. The resulting `inverse' measure can be considered as complementary to the Färe-Lovell (or ``Russell'') efficiency measure.

Suggested Citation

  • Laurens CHERCHYE & Tom VAN PUYENBROECK, 1999. "Product Mixes as Objects of Choice in Nonparametric Efficiency Measurement," Working Papers Department of Economics ces9901, KU Leuven, Faculty of Economics and Business, Department of Economics.
  • Handle: RePEc:ete:ceswps:ces9901
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    References listed on IDEAS

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    1. KERSTENs, Kris & VANDEN EECKAUT, Philippe, 1995. "Technical Efficiency Measures on DEA and FDH : A Reconsideration of the Axiomatic Literature," CORE Discussion Papers 1995013, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
    2. Henry Tulkens, 1993. "On FDH efficiency analysis: Some methodological issues and applications to retail banking, courts, and urban transit," Journal of Productivity Analysis, Springer, vol. 4(1), pages 183-210, June.
    3. 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.
    4. Robert Russell, R., 1985. "Measures of technical efficiency," Journal of Economic Theory, Elsevier, vol. 35(1), pages 109-126, February.
    5. Fare, Rolf & Knox Lovell, C. A., 1978. "Measuring the technical efficiency of production," Journal of Economic Theory, Elsevier, vol. 19(1), pages 150-162, October.
    6. Zieschang, Kimberly D., 1984. "An extended farrell technical efficiency measure," Journal of Economic Theory, Elsevier, vol. 33(2), pages 387-396, August.
    7. Russell, R. Robert, 1985. "On the Axiomatic Approach to the Measurement of Technical Efficiency," Working Papers 85-33, C.V. Starr Center for Applied Economics, New York University.
    8. Charnes, A. & Cooper, W. W. & Rhodes, E., 1979. "Measuring the efficiency of decision-making units," European Journal of Operational Research, Elsevier, vol. 3(4), pages 339-338, July.
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    Cited by:

    1. Laurens Cherchye & Tom Van Puyenbroeck, 1999. "A Shadow Price Approach to Technical Efficiency Measurement," Public Economics Working Paper Series ces9924, Katholieke Universiteit Leuven, Centrum voor Economische Studiën, Working Group Public Economics.
    2. Cherchye, Laurens & Van Puyenbroeck, Tom, 2009. "Semi-radial technical efficiency measurement," European Journal of Operational Research, Elsevier, vol. 193(2), pages 616-625, March.
    3. repec:eee:ejores:v:268:y:2018:i:1:p:386-397 is not listed on IDEAS
    4. Hirofumi Fukuyama & Hiroya Masaki & Kazuyuki Sekitani & Jianming Shi, 2014. "Distance optimization approach to ratio-form efficiency measures in data envelopment analysis," Journal of Productivity Analysis, Springer, vol. 42(2), pages 175-186, October.
    5. Maria Silva Portela & Pedro Borges & Emmanuel Thanassoulis, 2003. "Finding Closest Targets in Non-Oriented DEA Models: The Case of Convex and Non-Convex Technologies," Journal of Productivity Analysis, Springer, vol. 19(2), pages 251-269, April.
    6. Laurens Cherchye & Tom Van Puyenbroeck, 2001. "Technical Efficiency Evaluation: Naturally Dual!," Public Economics Working Paper Series wptchff, Katholieke Universiteit Leuven, Centrum voor Economische Studiën, Working Group Public Economics.

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