Investment and Dynamic DEA

Pierre Ouellette and Li Yan ()

RePAd Working Paper Series from Département des sciences administratives, UQO

Abstract: A dynamic version of Data Envelopment Analysis (DEA) is developed in the present paper. Our model introduces investment in traditional DEA and imposes intertemporal cost minimization. Adding an intertemporal adjustment constraint into the cost minimization problem, we derive the relation between the DEA variables of the cost function and those of the primary production frontiers’ coefficients. The augmented DEA model can be solved using standard linear programming. This dynamic framework enables computing the production frontiers, measuring the productive efficiencies and evaluating the potential economies all in the presence of adjustment costs.

Keywords: Adjustment cost; Data envelopment analysis; Efficiency; Multiple outputs/inputs; Quasi-fixed inputs. (search for similar items in EconPapers)
JEL-codes: D24 L23 (search for similar items in EconPapers)
Pages: 27 pages
Date: 2006-01-12
New Economics Papers: this item is included in nep-bec and nep-eff
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

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Journal Article: Investment and dynamic DEA (2008)
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