Technical Efficiency Evaluation: Naturally Dual!
We provide a dual perspective on technical efficiency evaluation, in two respects. First, we build on the price assumptions implicitly associated with the notion of technical efficiency in a general equilibrium framework to characterize a set of appropriate references to be used in the technical efficiency evaluation of an input-output vector. Some existing evaluation methods always select an element of this set, but other methods fail to do so. Second, the above framework leads us to assert that a well-grounded measure of technical efficiency is naturally decomposable. One part refers to technical efficiency as captured by the classical Debreu-Farrell measure. The other part refers to technical efficiency resulting from the “implicit allocative efficiency” or “mix efficiency” of the evaluated vector. We present both a quantity-based distance measure and its price-based equivalent to evaluate this complementary dimension of technical efficiency. This generalized perspective encompasses the standard Debreu-Farrell framework for technical efficiency evaluation, and makes it fully consistent with the well-established Koopmans efficiency notion.
|Date of creation:||2001|
|Contact details of provider:|| Postal: Naamsestraat 69, 3000 Leuven|
Phone: +32-(0)16-32 67 25
Fax: +32-(0)16-32 67 96
Web page: http://www.econ.kuleuven.ac.be/ew/academic/econover/default.htm
More information through EDIRC
|Order Information:|| Email: |
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Fare, Rolf & Grosskopf, Shawna & Lovell, C A Knox, 1983. " The Structure of Technical Efficiency," Scandinavian Journal of Economics, Wiley Blackwell, vol. 85(2), pages 181-190.
- Afriat, Sidney N, 1972. "Efficiency Estimation of Production Function," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 13(3), pages 568-598, October.
- Cherchye, Laurens & Van Puyenbroeck, Tom, 2001.
"Product mixes as objects of choice in non-parametric efficiency measurement,"
European Journal of Operational Research,
Elsevier, vol. 132(2), pages 287-295, July.
- Laurens Cherchye & Tom Vanpuyenbroeck, 1999. "Product mixes as objects of choice in nonparametric efficiency measurement," Public Economics Working Paper Series ces9901, Katholieke Universiteit Leuven, Centrum voor Economische Studiën, Working Group Public Economics.
- 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.
- 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.
- Robert Russell, R., 1985. "Measures of technical efficiency," Journal of Economic Theory, Elsevier, vol. 35(1), pages 109-126, February.
- 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.
- Hanoch, Giora & Rothschild, Michael, 1972. "Testing the Assumptions of Production Theory: A Nonparametric Approach," Journal of Political Economy, University of Chicago Press, vol. 80(2), pages 256-275, March-Apr.
- J. v. Neumann, 1945. "A Model of General Economic Equilibrium," Review of Economic Studies, Oxford University Press, vol. 13(1), pages 1-9.
- Laurens Cherchye & Timo Kuosmanen & Thierry Post, 2001. "FDH Directional Distance Functions with an Application to European Commercial Banks," Journal of Productivity Analysis, Springer, vol. 15(3), pages 201-215, January.
- Charnes, A. & Cooper, W. W. & Golany, B. & Seiford, L. & Stutz, J., 1985. "Foundations of data envelopment analysis for Pareto-Koopmans efficient empirical production functions," Journal of Econometrics, Elsevier, vol. 30(1-2), pages 91-107. Full references (including those not matched with items on IDEAS)