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A Non-Radial Measure of Efficiency in Indian Textile Industry: An Analysis of Unit-Level Data


  • Subhash C. Ray

    (University of Connecticut)

  • Chiranjib Neogi

    (Indian Statistical Institute, Calcutta)


In this paper we apply Data Envelopment Analysis (DEA) to firm level data from various years of Annual Survey of Industry to obtain Pareto-Koopmans measures of technical efficiency in the Indian textile garments industry. The overall efficiency measure is multiplicatively decomposed into an input- and an output-oriented Russell type non-radial measure. For the second stage regression of DEA efficiency scores in terms of age, ownership, regional location, and other characteristics of a firm, we perform a Box-Cox transformation of the one-sided dependent variable to avoid using a Tobit regression in a context where there is no obvious censoring of the data.

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  • Subhash C. Ray & Chiranjib Neogi, 2007. "A Non-Radial Measure of Efficiency in Indian Textile Industry: An Analysis of Unit-Level Data," Working papers 2007-38, University of Connecticut, Department of Economics.
  • Handle: RePEc:uct:uconnp:2007-38

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    References listed on IDEAS

    1. Danish Hashim, 2004. "Cost & productivity in Indian textiles: Post MFA implications," Indian Council for Research on International Economic Relations, New Delhi Working Papers 147, Indian Council for Research on International Economic Relations, New Delhi, India.
    2. 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.
    3. Chambers, Robert G. & Chung, Yangho & Fare, Rolf, 1996. "Benefit and Distance Functions," Journal of Economic Theory, Elsevier, vol. 70(2), pages 407-419, August.
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    More about this item


    DEA; Pareto-Koopmans Efficiency; Box-Cox Transformation;

    JEL classification:

    • L67 - Industrial Organization - - Industry Studies: Manufacturing - - - Other Consumer Nondurables: Clothing, Textiles, Shoes, and Leather Goods; Household Goods; Sports Equipment
    • C61 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - Optimization Techniques; Programming Models; Dynamic Analysis


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