A DEA approach to derive individual lower and upper bounds for the technical and allocative components of the overall profit efficiency
José Ruiz and
Inmaculada Sirvent
Journal of the Operational Research Society, 2011, vol. 62, issue 11, 1907-1916
Abstract:
In this paper, we propose a slack-based data envelopment analysis approach to be used in economic efficiency analyses when the objective is profit maximization. The focus is on the measurement of the technical component of the overall efficiency with the purpose of guaranteeing the achievement of the Pareto efficiency. As a result, we will be able to estimate correctly the allocative component in the sense that this latter only reflects the improvements that can be accomplished by reallocations along the Pareto-efficient frontier. Some new measures of technical and allocative efficiency in terms of both profit ratios and differences of profits are defined. We do not make any assumption on the way the technical efficiency is to be measured, that is, we do not use, for example, either a hyperbolic measure or a directional distance function, which allows us to extend this approach and derive individual lower and upper bounds for these efficiency components. To do it, we use novel models of minimum distance to the frontier. This broadens the range of possibilities for the explanation of the overall efficiency in terms of technical and allocative inefficiencies.
Date: 2011
References: Add references at CitEc
Citations: View citations in EconPapers (9)
Downloads: (external link)
http://www.palgrave-journals.com/jors/journal/v62/n11/pdf/jors2010140a.pdf Link to full text PDF (application/pdf)
http://www.palgrave-journals.com/jors/journal/v62/n11/full/jors2010140a.html Link to full text HTML (text/html)
Access to full text is restricted to subscribers.
Related works:
Journal Article: A DEA approach to derive individual lower and upper bounds for the technical and allocative components of the overall profit efficiency (2011) 
This item may be available elsewhere in EconPapers: Search for items with the same title.
Export reference: BibTeX
RIS (EndNote, ProCite, RefMan)
HTML/Text
Persistent link: https://EconPapers.repec.org/RePEc:pal:jorsoc:v:62:y:2011:i:11:p:1907-1916
Ordering information: This journal article can be ordered from
http://www.springer. ... search/journal/41274
Access Statistics for this article
Journal of the Operational Research Society is currently edited by Tom Archibald and Jonathan Crook
More articles in Journal of the Operational Research Society from Palgrave Macmillan, The OR Society
Bibliographic data for series maintained by Sonal Shukla () and Springer Nature Abstracting and Indexing ().