Aggregation and decomposition of Farrell efficiencies

Rolf Färe and Giannis Karagiannis
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Rolf Färe: Oregon State University

Operational Research, 2022, vol. 22, issue 5, No 30, 5675-5683

Abstract: Abstract In paper we examine the conditions under which aggregate overall Farrell efficiency decomposes by both observation (i.e., firms) and source (i.e., technical and allocative efficiency) using the same set of aggregation weights. These conditions require firms to produce a single output with a homogenous of degree $$r > 0$$ r > 0 technology. Then, Farrell decomposition at the firm level is also preserved at the industry level.

Keywords: Efficiency aggregation weights; Homogeneous of degree r technology; Single output or single input technologies (search for similar items in EconPapers)
Date: 2022
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DOI: 10.1007/s12351-022-00721-1

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