Convexity, Disposability and Returns to Scale in Production Analysis

Manh D. Pham and Valentin Zelenyuk

No WP042017, CEPA Working Papers Series from University of Queensland, School of Economics

Abstract: Adequate modelling of undesirable outputs is a key aspect for any performance analysis of economic systems. A nonparametric approach assuming jointly weak disposability of desirable and undesirable outputs inspired by Shephard (1974) has gained substantial popularity in addressing this issue. Recently, researchers were offered an alternative that is to use multiple scaling factors (rather than a single one as in the Shephard’s (1974) approach) when imposing weak disposability in practice. In this paper we discover new properties and relationships between the two approaches, which in turn sheds some new light on the problem and offers reconciling solutions.

Keywords: Data envelopment analysis; Nonparametric productivity analysis; Weak disposability; Undesirable outputs; Environmental performance (search for similar items in EconPapers)
JEL-codes: C14 C44 C51 D24 M11 (search for similar items in EconPapers)
Date: 2017-10
New Economics Papers: this item is included in nep-eff
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Citations: View citations in EconPapers (2)

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Persistent link: https://EconPapers.repec.org/RePEc:qld:uqcepa:121

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