The Experts below are selected from a list of 3633 Experts worldwide ranked by ideXlab platform
Giovanni Cesaroni - One of the best experts on this subject based on the ideXlab platform.
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The Shape of Ray Average Cost and Its Role in Multioutput Scale Economies: Some Generalisations
2020Co-Authors: Giovanni Cesaroni, Kristiaan Kerstens, Ignace Van De WoestyneAbstract:Establishing a link between the so-called “neoclassical” and “axiomatic” approaches to production theory, we deal with some central and unresolved issues concerning scale economies in multi-output technologies. First, we reformulate Panzar and Willig’s (1977) result on the duality between primal and dual scale elasticity measures, which helps pointing out the unknown role played in this regard by the monotonicity of the local degree of homogeneity of the technology. Second, under a general representation of a convex technology - allowing for non-differentiability of the Cost function and multiple optima - we determine the shape of the Ray Average Cost function. Third, in the same setting, we determine an unambiguous relationship between Cost scale elasticity and Cost scale efficiency, and therefore between local and global scale economies. Fourth, we develop a complete map of values taken by primal and dual scale elasticities and point out that the equality between returns to scale and scale economies local measures breaks down in a convex technology at points where the Cost function is not differentiable. These general results are then applied to simplification and solution of some theoretical and computational problems featured by some important models for the estimation of scale economies, such those of Baumol and Fisher (1978), Fare and Grosskopf (1985) and Sueyoshi (1999).
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Industry Cost efficiency in data envelopment analysis
Socio-Economic Planning Sciences, 2018Co-Authors: Giovanni CesaroniAbstract:In data envelopment analysis (DEA) and with a variable returns-to-scale (VRS) technology, we implement Baumol et al.’s [1] concept of “Cost minimizing industry structure”, which features reallocation of outputs and a variable number of firms. The characterization of this type of optimal allocation adds to the literature on structural efficiency, which so far has not dealt with it in such a general framework. At the theoretical level, we both determine a decomposition of the industry measure, which establishes the relationship between group and individual measures, and provide its rigorous economic interpretation based on the Ray Average Cost. Moreover, our framework allows to highlight the relationship between the industry measure and different returns-to-scale characterizations of the technology. At the applicative level we devise an algorithm to solve the related non-linear programming problem, thus providing the decision maker with a method to compute the optimal industry structure and the corresponding efficiency components. Empirical illustration is given with reference to the Italian local-public-transit sector employing a multiple input and output technology.
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Estimating scale economies in non-convex production models
Journal of the Operational Research Society, 2017Co-Authors: Giovanni Cesaroni, Kristiaan Kerstens, Ignace Van De WoestyneAbstract:The literature on nonparametric frontier technologies lacks a method for the measurement of scale economies in non-convex settings. This paper proposes a general procedure which is based on the minimization of the Ray Average Cost and requires the solution of a single programming problem. Our approach allows for multiple optima to introduce the case of global sub-constant scale economies, and it also permits the estimation of scale economies at a local level. The empirical application investigates the role of replicability and the relationship between global and local indicators. It also points out the managerial implications for companies operating in the Italian public transit industry.
Ignace Van De Woestyne - One of the best experts on this subject based on the ideXlab platform.
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The Shape of Ray Average Cost and Its Role in Multioutput Scale Economies: Some Generalisations
2020Co-Authors: Giovanni Cesaroni, Kristiaan Kerstens, Ignace Van De WoestyneAbstract:Establishing a link between the so-called “neoclassical” and “axiomatic” approaches to production theory, we deal with some central and unresolved issues concerning scale economies in multi-output technologies. First, we reformulate Panzar and Willig’s (1977) result on the duality between primal and dual scale elasticity measures, which helps pointing out the unknown role played in this regard by the monotonicity of the local degree of homogeneity of the technology. Second, under a general representation of a convex technology - allowing for non-differentiability of the Cost function and multiple optima - we determine the shape of the Ray Average Cost function. Third, in the same setting, we determine an unambiguous relationship between Cost scale elasticity and Cost scale efficiency, and therefore between local and global scale economies. Fourth, we develop a complete map of values taken by primal and dual scale elasticities and point out that the equality between returns to scale and scale economies local measures breaks down in a convex technology at points where the Cost function is not differentiable. These general results are then applied to simplification and solution of some theoretical and computational problems featured by some important models for the estimation of scale economies, such those of Baumol and Fisher (1978), Fare and Grosskopf (1985) and Sueyoshi (1999).
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Estimating scale economies in non-convex production models
Journal of the Operational Research Society, 2017Co-Authors: Giovanni Cesaroni, Kristiaan Kerstens, Ignace Van De WoestyneAbstract:The literature on nonparametric frontier technologies lacks a method for the measurement of scale economies in non-convex settings. This paper proposes a general procedure which is based on the minimization of the Ray Average Cost and requires the solution of a single programming problem. Our approach allows for multiple optima to introduce the case of global sub-constant scale economies, and it also permits the estimation of scale economies at a local level. The empirical application investigates the role of replicability and the relationship between global and local indicators. It also points out the managerial implications for companies operating in the Italian public transit industry.
V. E. Krivonozhko - One of the best experts on this subject based on the ideXlab platform.
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Farrell revisited–Visualizing properties of DEA production frontiers
Journal of the Operational Research Society, 2009Co-Authors: Finn R. Førsund, Sverre A.c. Kittelsen, V. E. KrivonozhkoAbstract:The contributions of the paper are threefold: (i) compare with mathematical rigour the data envelopment analysis (DEA) model of Charnes, Cooper, and Rhodes and the Farrell model exhibiting constant returns to scale, (ii) reinterpret the contribution of Farrell and Fieldhouse that extended the analysis to variables returns to scale and establish the connection with the approach in Banker, Charnes, and Cooper, and (iii) provide graphical visualization of properties of the frontier function. Both papers by Farrell emphasized the importance of graphical visualization of non-parametric frontier functions, but, to our knowledge, this is seldom followed up in the literature. We use a graphical package (EffiVision) with a numerical representation of the frontier functions, representing the contemporary development of visualization. By making suitable cuts through the DEA frontier in multidimensional space, various graphical representations of features of economic interest can be done. Development of Ray Average Cost function and scale elasticity plots are novel illustrations.
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Farrell Revisited: Visualising the DEA Production Frontier
Memorandum (institute of Pacific Relations American Council), 2007Co-Authors: Finn R. Førsund, Sverre A.c. Kittelsen, V. E. KrivonozhkoAbstract:The contributions of the paper are threefold: i) compare with mathematical rigour the Charnes, Cooper, and Rhodes DEA model and the Farrell model exhibiting constant returns to scale, ii) reinterpret the contribution of Farrell and Fieldhouse that extended the analysis to variables returns to scale and establish the connection with the approach in Banker, Charnes and Cooper, iii) provide graphical visualisation of properties of the frontier function. Both papers by Farrell emphasised the importance of graphical visualisation of non-parametric frontier functions, but, to our knowledge, this is seldom followed up in the literature. We use a graphical package (EffiVision) with a numerical representation of the frontier functions, representing the contemporary development of visualisation. By making suitable cuts through the DEA frontier in multidimensional space, various graphical representations of features of economic interest can be done. Development of Ray Average Cost function and scale elasticity are novel illustrations.
Finn R. Førsund - One of the best experts on this subject based on the ideXlab platform.
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Farrell revisited–Visualizing properties of DEA production frontiers
Journal of the Operational Research Society, 2009Co-Authors: Finn R. Førsund, Sverre A.c. Kittelsen, V. E. KrivonozhkoAbstract:The contributions of the paper are threefold: (i) compare with mathematical rigour the data envelopment analysis (DEA) model of Charnes, Cooper, and Rhodes and the Farrell model exhibiting constant returns to scale, (ii) reinterpret the contribution of Farrell and Fieldhouse that extended the analysis to variables returns to scale and establish the connection with the approach in Banker, Charnes, and Cooper, and (iii) provide graphical visualization of properties of the frontier function. Both papers by Farrell emphasized the importance of graphical visualization of non-parametric frontier functions, but, to our knowledge, this is seldom followed up in the literature. We use a graphical package (EffiVision) with a numerical representation of the frontier functions, representing the contemporary development of visualization. By making suitable cuts through the DEA frontier in multidimensional space, various graphical representations of features of economic interest can be done. Development of Ray Average Cost function and scale elasticity plots are novel illustrations.
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Farrell Revisited: Visualising the DEA Production Frontier
Memorandum (institute of Pacific Relations American Council), 2007Co-Authors: Finn R. Førsund, Sverre A.c. Kittelsen, V. E. KrivonozhkoAbstract:The contributions of the paper are threefold: i) compare with mathematical rigour the Charnes, Cooper, and Rhodes DEA model and the Farrell model exhibiting constant returns to scale, ii) reinterpret the contribution of Farrell and Fieldhouse that extended the analysis to variables returns to scale and establish the connection with the approach in Banker, Charnes and Cooper, iii) provide graphical visualisation of properties of the frontier function. Both papers by Farrell emphasised the importance of graphical visualisation of non-parametric frontier functions, but, to our knowledge, this is seldom followed up in the literature. We use a graphical package (EffiVision) with a numerical representation of the frontier functions, representing the contemporary development of visualisation. By making suitable cuts through the DEA frontier in multidimensional space, various graphical representations of features of economic interest can be done. Development of Ray Average Cost function and scale elasticity are novel illustrations.
Thomas L. Cox - One of the best experts on this subject based on the ideXlab platform.
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A Generalized Distance Function and the Analysis of Production Efficiency
Southern Economic Journal, 1999Co-Authors: Jean-paul Chavas, Thomas L. CoxAbstract:A generalization of Shephard’s distance functions is proposed, extending the usefulness of distance functions in economic analysis. Applications to efficiency measurements and productivity analysis are presented. New indexes of productivity and technical, allocative, and scale efficiency are proposed and analyzed. Interpretation of these indexes in terms of Ray-Average Cost, Ray-Average revenue, and Cost-to-revenue ratio is discussed.
