The Measurement of Efficiency of Production
Shawna Grosskopf1985
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AI-generated Abstract
The paper presents a comprehensive analysis of various methodologies for measuring production efficiency. It discusses several output and input efficiency measures, including radial and non-radial approaches, as well as the use of linear programming in these contexts. The impact of inefficiencies on production and the conceptual frameworks surrounding production technology are explored, providing insights into optimizing production processes.
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The Measurement of Efficiency
of Production
Studies in Productivity Analysis
Ali Dogramaci, Editor
Cornell University
Titles in the Series:
Adam, Dogramaci; Productivity Analysis at the Organizational
Level
Dogramaci, Adam; Aggregate and Industry-Level Productivity
Analysis
Dogramaci; Productivity Analysis: A Range of Perspectives
Dogramaci; Developments in Econometric Analyses of
Productivity: Measurement and Modelling Issues
Sud it; Productivity Based Management
The Measurement of Efficiency
of Production
by
Rolf Fare,
Shawn a Grosskopf,
and C. A. Knox Lovell
u
"
Springer Science+Business Media, LLC
Library of Congress Cataloging in Publication Data
Fare, Rolf, 1942The measurement of efficiency of production,
(Studies in productivity analysis)
Bibliography: p,
Includes index.
1. Production (Economic theory) 2. Efficiency,
Industrial. I. Grosskopf, Shawn a II. Lovell, C.A.
Knox. III. Title. IV. Series.
HB241.F335 1984
338'.06'072
84-872
ISBN 978-90-481-5813-3
ISBN 978-94-015-7721-2 (eBook)
DOI 10.1007/978-94-015-7721-2
Copyright 1985 by Springer Science+Business Media New Yorl<
Originally published by Kluwer-Nijhoff Publishers in 1985
Softcover reprint of the hardcover 1st edition 1985
No part of this book may be reproduced in any form by print, photoprint, microfilm, or any other means
without written permission of the publisher.
To
Carolina, Claire, and Ian
TABLE OF CONTENTS
1
Introduction
1.0 Introduction
1.1 The Treatment of Efficiency in Modern Production Theory
1.2 The Recognition of Inefficiency in Modern Production
Theory
1.3 The Introduction of Inefficiency in Applied Production
Theory
1.4 The Plan of the Book
9
15
2
The
2.0
2.1
2.2
2.3
2.4
2.5
21
21
23
28
38
41
45
3
Structure of Production Technology
Introduction
The Input and Output Correspondences
Subsets of the Input and Output Correspondences
Production Functions
Special Production Structures
The Graph and its Subsets
Radial Input Efficiency Measures
3.0 Introduction
3.1 Radial Input Efficiency Measures
3.2 The Farrell Input Measure of Technical Efficiency
3.3 The Weak Input Measure of Technical Efficiency
3.4 The Overall Input Efficiency Measure
3.5 The Input Congestion Measure
3.6 The Allocative Input Efficiency Measure
3.7 Linear Programming Example
vi
1
1
5
6
49
49
50
53
57
64
67
71
74
vii
4
Radial Output Efficiency Measures
4.0 Introduction
4.1 Radial Output Efficiency Measures
4.2 The Farrell Output Measure of Technical Efficiency
4.3 The Weak Output Measure of Technical Efficiency
4.4 The Overall Output Efficiency Measure
4.5 Measuring Output Loss Due to Lack of Disposability
4.6 The Allocative Output Efficiency Measure
4.7 Calculating Output Efficiency: A Linear Programming
Example
5
Hyperbolic Graph Efficiency Measures
5.0 Introduction
5.1 Hyperbolic Graph Efficiency Measures
5.2 The Farrell Graph Measure of Technical Efficiency
5.3 The Weak Graph Measure of Technical Efficiency
5.4 The Overall Graph Efficiency Measure
5.5 Measuring I nput-Output Loss due to Lack of
Disposability
5.6 The Allocative Graph Efficiency Measure
5.7 Generalized Hyperbolic Graph Efficiency Measures
5.8 Linear Programming Example
6
A Comparison of Input, Output, and Graph Efficiency Measures
6.0 Introduction
6.1 Comparison of Radial Input and Output Measures
6.2 Graph Measures Compared to Input and Output
Measures
7
Nonradial Efficiency Measures
7.0 Introduction
7.1 The Russell Input Measure of Technical Efficiency
7.2 The Russell Output Measure of Technical Efficiency
7.3 The Russell Graph Measure of Technical Efficiency
7.4 Comparison of Russell Measures
7.5 Computing the Russell Measures
8
Measures of Scale Efficiency
8.0 Introduction
8.1 The Constant Returns to Scale Extended Technology
8.2 The Input Scale Efficiency Measure
8.3 The Output Scale Efficiency Measure
8.4 The Graph Scale Efficiency Measure
79
79
80
83
87
93
96
99
102
107
107
108
110
113
118
121
122
125
127
131
131
132
136
141
141
143
148
153
159
159
163
163
164
166
170
174
Vlll
8.5
8.6
8.7
Linear Programming Example
Sources of Scale Efficiency
Computing Sources of Scale Inefficiency
179
181
184
9
Toward Empirical Implementation
9.0 Introduction
9.1 Summary of the Main Results
9.2 Unfinished Business
9.3 Toward Empirical Implementation
187
187
187
191
191
Appendix: Standard Notations and Mathematical Appendix
A.1 Some Standard Notations
A.2 Mathematical Appendix
201
201
202
Bibliography
Author Index
Subject Index
204
213
215
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