On the Technically Efficient Organization of an Industry: A Study of U.S. Airlines

Subhash Ray and Xiaowen Hu

Journal of Productivity Analysis, 1997, vol. 8, issue 1, 5-18

Abstract: In nonparametric analysis of production efficiency, the focus of attention is typically on the individual firm. In this article, we evaluate efficiency in resource utilization at the industry level. We propose an integer programming model to measure the extent of input saving possible if the observed output level of the industry is allocated to an optimal number of identical firms. This approach is applied to data for U.S. airlines covering the period 1970–84. Our results confirm that there were too few airlines prior to deregulation and suggest that there were too many firms during the early years of the post-deregulation era. Copyright Kluwer Academic Publishers 1997

Keywords: size efficiency; industry restructuring; integer programming (search for similar items in EconPapers)
Date: 1997
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Citations: View citations in EconPapers (22)

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DOI: 10.1023/A:1007751413007

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