Allocative Efficiency of Technically Inefficient Production Units

Peter Bogetoft and Rolf Fare

No 24217, Unit of Economics Working Papers from Royal Veterinary and Agricultural University, Food and Resource Economic Institute

Abstract: We discuss how to measure allocative efficiency without presuming technical efficiency. This is relevant when it is easier to introduce reallocations than improvements of technical efficiency. We compare the approach to the traditional one of assuming technical efficiency before measuring allocative efficiency. In particular, we develop necessary and sufficient conditions on the technology to ensure consistent measures and we give dual organizational interpretations of the approaches.

Keywords: Research; and; Development/Tech; Change/Emerging; Technologies (search for similar items in EconPapers)
Pages: 18
Date: 1999
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Citations: View citations in EconPapers (4)

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Related works:
Journal Article: Allocative efficiency of technically inefficient production units (2006)
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Persistent link: https://EconPapers.repec.org/RePEc:ags:rvaewp:24217

DOI: 10.22004/ag.econ.24217

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