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A Generalized Distance Function and the Analysis of Production Efficiency

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  • JEAN-PAUL CHAVAS
  • THOMAS L. COX

Abstract

A generalization of Shephard's distance functions is proposed, extending the usefulness of distance functions in economic analysis. Applications to efficiency measurements and productivity analysis are presented. New indexes of productivity, and technical, allocative and scale efficiency are proposed and analyzed. Interpretation of these indexes in terms of ray-average cost, ray-average revenue, and cost-to-revenue ratio is discussed.
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  • Jean-Paul Chavas & Thomas L. Cox, 1999. "A Generalized Distance Function and the Analysis of Production Efficiency," Wisconsin-Madison Agricultural and Applied Economics Staff Papers 422, Wisconsin-Madison Agricultural and Applied Economics Department.
    • Handle: RePEc:wop:wisaes:422
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