How to properly decompose economic efficiency using technical and allocative criteria with non-homothetic DEA technologies

How to properly decompose economic efficiency using technical and allocative criteria with non-homothetic DEA technologies

We discuss how to properly decompose economic efficiency when the underlying technology is non-homothetic using alternative allocative and technical efficiency criteria. We first show that only under the production of one output and assuming the particular case of constant returns to scale homotheticity, we may claim that the standard radial models correctly measure pure technical efficiency. O...

Non convex technologies and economic efficiency measure with imprecise data

Partitioning Input Cost Efficiency into Its Allocative and Technical Components. an Empirical Dea Application to Hospitals

The study presents an empirical analysis of best practice production and cost frontiers for a sample of 94 acute care hospitals by applying Data Envelopment Analysis (DEA) and a regression model, in a two-stage approach. This paper contributes to the DEA and efficiency measurement literatures by adding results from a homogeneous method of partitioning cost efficiency into its allocative (or pri...

Allocative vs. Technical Spectrum Efficiency

Achieving allocative and technically efficient spectrum management is a key aspect of deregulatory reforms in several OECD countries. However, reform legislation offers few clues as to how these objectives should rank when they conflict with one another. An `innocent' prior acquisition of service-neutral spectrum at an efficiently run auction may prove allocative efficient but fail to be techni...

Technical and allocative efficiency in European banking

This paper specifies an empirical framework for estimating both technical and allocative efficiency, which is applied to a large panel of European banks over the years 1996 to 2003. Our methodology allows for self-consistent measurement of technical and allocative inefficiency, in an effort to address the issue known in the literature as the Greene problem. The results suggest that, on average,...