Maintaining the Regular Ultra Passum Law in data envelopment analysis

Ole B. Olesen and John Ruggiero

European Journal of Operational Research, 2014, vol. 235, issue 3, 798-809

Abstract: The variable returns to scale data envelopment analysis (DEA) model is developed with a maintained hypothesis of convexity in input–output space. This hypothesis is not consistent with standard microeconomic production theory that posits an S-shape for the production frontier, i.e. for production technologies that obey the Regular Ultra Passum Law. Consequently, measures of technical efficiency assuming convexity are biased downward. In this paper, we provide a more general DEA model that allows the S-shape.

Keywords: Data envelopment analysis (DEA); S-shaped production function; Convex hull estimation; Isoquant estimation (search for similar items in EconPapers)
Date: 2014
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Citations: View citations in EconPapers (14)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:ejores:v:235:y:2014:i:3:p:798-809

DOI: 10.1016/j.ejor.2014.01.016

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