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A Generalized Distance Function and the Analysis of Production Efficiency
Author(s) -
Chavas JeanPaul,
Cox Thomas L.
Publication year - 1999
Publication title -
southern economic journal
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.762
H-Index - 58
eISSN - 2325-8012
pISSN - 0038-4038
DOI - 10.1002/j.2325-8012.1999.tb00248.x
Subject(s) - allocative efficiency , productivity , revenue , generalization , production (economics) , econometrics , function (biology) , mathematics , economics , returns to scale , scale (ratio) , microeconomics , macroeconomics , physics , mathematical analysis , accounting , evolutionary biology , biology , quantum mechanics
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.