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Production frontier estimation to measure efficiency: A critical evaluation in light of data envelopment analysis
Author(s) -
Sengupta Jati K.
Publication year - 1987
Publication title -
managerial and decision economics
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.288
H-Index - 51
eISSN - 1099-1468
pISSN - 0143-6570
DOI - 10.1002/mde.4090080203
Subject(s) - data envelopment analysis , ranking (information retrieval) , frontier , measure (data warehouse) , envelopment , production (economics) , econometrics , function (biology) , production function , economics , estimation , production–possibility frontier , production theory , efficient frontier , computer science , mathematics , statistics , microeconomics , data mining , financial economics , artificial intelligence , portfolio , management , archaeology , evolutionary biology , biology , history
The ranking and measurement of efficiency of decision‐making units by two methods—data envelopment analysis and frontier production function—may not always lead to identical results. In this framework we attempt here a critical evaluation of the frontier production function theory in terms of theoretical and empirical implications. It is shown that under certain conditions the two approaches to effciency measurement may lead to identical results.