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STATIC EFFICIENCY DECOMPOSITIONS AND CAPACITY UTILISATION: INTEGRATING ECONOMIC AND TECHNICAL CAPACITY NOTIONS

Diego Prior, Bruno De Borger, Kristiaan Kerstens and Ignace van de Woestyne ()
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Ignace van de Woestyne: Department of Economics - Hogeschool-Universiteit Brussel

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Abstract: Starting from existing static decompositions of overall economic efficiency on non parametric production and cost frontiers, this paper proposes more comprehensive decompositions including several cost based notions of capacity utilisation. Furthermore, in case prices are lacking, we develop additional decompositions of overall technical efficiency integrating a technical concept of capacity utilisation. These new efficiency decompositions provide a link between short and long run economic analysis and, in empirical work, avoid conflating inefficiency and differences in capacity utilisation. An empirical analysis using a monthly panel of Chilean hydro-electric power plants illustrates the potential of these decomposition proposals.

Keywords: Social; Sciences; &; Humanities (search for similar items in EconPapers)
Date: 2011-07-15
Note: View the original document on HAL open archive server: https://hal.science/hal-00717976v1
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Published in Applied Economics, 2011, pp.1. ⟨10.1080/00036846.2011.587783⟩

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Working Paper: Static efficiency decompositions and capacity utilization: integrating economic and technical capacity notions (2012)
Working Paper: Static Efficiency Decompositions and Capacity Utilisation: Integrating Economic and Technical Capacity Notions (2009) Downloads
Working Paper: Static efficiency decompositions and capacity utilisation: integrating economic and technical capacity notions (2007)
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Persistent link: https://EconPapers.repec.org/RePEc:hal:journl:hal-00717976

DOI: 10.1080/00036846.2011.587783

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