Nonparametric Analysis of Technology and Productivity under Non-Convexity

Jean-Paul Chavas () and Kwansoo Kim

No 149684, 2013 Annual Meeting, August 4-6, 2013, Washington, D.C. from Agricultural and Applied Economics Association

Abstract: This paper investigates the nonparametric analysis of technology under non-convexity. The analysis extends two approaches now commonly used in efficiency and productivity analysis: Data Envelopment Analysis (DEA) where convexity is imposed; and Free Disposal Hull (FDH) models. We argue that, while the FDH model allows for non-convexity, its representation of non-convexity is too extreme. We propose a new nonparametric model that relies on a neighborhood-based technology assessment which allows for less extreme forms of non-convexity. The distinctive feature of our approach is that it allows for non-convexity to arise in any part of the feasible set. We show how it can be implemented empirically by solving simple linear programming problems. And we illustrate the usefulness of the approach in an empirical application to the analysis of technical and scale efficiency on Korean farms.

Keywords: Farm Management; Production Economics; Productivity Analysis; Research Methods/ Statistical Methods (search for similar items in EconPapers)
Pages: 36
Date: 2013
New Economics Papers: this item is included in nep-ecm and nep-eff
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Persistent link: https://EconPapers.repec.org/RePEc:ags:aaea13:149684

DOI: 10.22004/ag.econ.149684

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