Consistency of returns-to-scale characterizations of production frontiers with respect to model specification

Victor V. Podinovski and Tatiana Bouzdine-Chameeva

European Journal of Operational Research, 2020, vol. 280, issue 2, 609-620

Abstract: Returns-to-scale (RTS) characterizations and the underlying notion of scale elasticity are important characteristics of production frontiers, in both parametric and nonparametric methodologies of efficiency and productivity analysis. In practical applications of these methodologies, the model of technology is often experimented with and modified before it is finalized, which involves, for example, a change of the data set, incorporation, exclusion or aggregation of inputs and outputs, or experimentation with the production assumptions, or axioms, on which the model is based. While it is well-known how such modifications of technology affect the efficiency scores, their effect on the RTS characterization of the production frontier has not been sufficiently explored in the literature. In this paper we obtain several general results that clarify this issue.

Keywords: Data envelopment analysis; Production technology; Returns to scale; Scale elasticity (search for similar items in EconPapers)
Date: 2020
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Persistent link: https://EconPapers.repec.org/RePEc:eee:ejores:v:280:y:2020:i:2:p:609-620

DOI: 10.1016/j.ejor.2019.07.043

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