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Additional resources for Advanced Robust and Nonparametric Methods in Efficiency Analysis: Methodology and Applications (Studies in Productivity and Efficiency)
P (x) is convex ∀x ∈ Rp+ and C(y) is convex ∀y ∈ Rq+ . e. EA5 implies EA6. A further characterization of the shape of the frontier relates to returns to scale (RTS). According to a standard definition in economics, RTS express the relation between a proportional change in inputs to a productive process and the resulting proportional change in output. If an n per cent rise in all inputs produces an n per cent increase in output, there are constant returns to scale (CRS). If output rises by a larger percentage than inputs, there are increasing returns to scale (IRS).
F¨are (1975), F¨are and Lovell (1978) and Russell (1985, 1988, 1990) among others. Farrell (1957) extended the work initiated by Koopmans and Debreu by noting that production efficiency has a second component reflecting the ability of producers to select the “right” technically efficient input-output vector in light of prevailing input and output prices. This led Farrell to define overall productive efficiency as the product of technical and allocative efficiency. Implicit in the notion of allocative efficiency is a specific behavioral assumption about the goal of the producer; Farrell considered cost-minimization in competitive inputs markets, although all the behavioral assumptions can be considered.
Thus Niskanen (1971) argued that public managers are budget maximizers, de Alessi (1974) argued that public managers exhibit a bias toward capital-intensive budgets, and Lindsay (1976) argued that public managers exhibit a bias toward “visible” inputs. However, ownership forms are more varied than just private or public. Hansmann (1988), in facts, identifies investor-owned firms, customerowned firms, worker-owned firms, as well as firms without owners (nonprofit enterprisers). Each of them deals in a different way with problems associated with hierarchy, coordination, incomplete contracts and monitoring and agency costs.
Advanced Robust and Nonparametric Methods in Efficiency Analysis: Methodology and Applications (Studies in Productivity and Efficiency) by Cinzia Daraio