Returms-to-scale Properties in DEA Models: The Fundamental Role of Interior Points

Vladimir Krivonozhko and Finn Førsund
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Vladimir Krivonozhko: Institute for Systems Analysis, Academy of Sciences, Moscow

No 15/2009, Memorandum from Oslo University, Department of Economics

Abstract: Attempts can be found in the DEA literature to identify returns to scale at efficient interior points of the production possibility set on the basis of returns to scale at points of the corresponding reference sets. However, an opposite approach is put forward in this paper, advocating that returns-to-scale properties of efficient reference units should be found by identifying first returns to scale of an efficient interior unit that is a radial projection to the frontier of an inefficient unit. Returns-to-scale properties of both the corresponding reference units and units supporting the face in question can then be established.

Keywords: Returns to scale; DEA; Interior points; Vertices (search for similar items in EconPapers)
JEL-codes: C61 D20 (search for similar items in EconPapers)
Pages: 22 pages
Date: 2009-08-04
New Economics Papers: this item is included in nep-ecm and nep-eff
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Citations: View citations in EconPapers (2)

Published as Krivonozhko, Vladimir, Finn R. Førsund and Andrey V. Lychev, 'Returms-to-scale Properties in DEA Models: The Fundamental Role of Interior Points' in Journal of productivity analysis, 2012, pages 121-130.

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Journal Article: Returns-to-scale properties in DEA models: the fundamental role of interior points (2012)
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