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On constant elasticity of substitution – Constant elasticity of transformation Directional Distance Functions

Paola Ravelojaona

European Journal of Operational Research, 2019, vol. 272, issue 2, 780-791

Abstract: This paper aims to present non-linear CES (Constant Elasticity of Substitution)–CET (Constant Elasticity of Transformation) Directional Distance Functions. These measures inherit the structure of the standard Directional Distance Functions and that of the CES–CET technology. These functions allow non-parametric estimation of efficiency scores through linear programming method. Besides, the CES –CET technology gives the opportunity to explore α-returns to scale assumption for the new distance functions. The duality theory is investigated through pseudo profit, cost and revenue functions. The dual standpoint provides non-linear adjusted prices that can occur into non-linear pricing practices. An application is proposed to give an illustrative example of the primal CES–CET Directional Distance Functions.

Keywords: Data Envelopment Analysis; CES–CET technology; Directional Distance Function; Generalized convexity; Nonlinear duality, (search for similar items in EconPapers)
Date: 2019
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Handle: RePEc:eee:ejores:v:272:y:2019:i:2:p:780-791