Open AccessScale elasticity in the presence of integer data: An application to electricity distribution companies
Author(s) -
Homeira Amirmohammadi,
Alireza Amirteimoori,
Sohrab Kordrostami,
Mohsen Vaez-Ghasemi
Publication year - 2021
Publication title -
estudios de economía aplicada
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.123
H-Index - 6
eISSN - 1697-5731
pISSN - 1133-3197
DOI - 10.25115/eea.v39i1.3155
Subject(s) - elasticity (physics) , data envelopment analysis , mathematical optimization , integer programming , returns to scale , integer (computer science) , linear programming , econometrics , scale (ratio) , computer science , mathematics , economics , production (economics) , microeconomics , geography , materials science , programming language , composite material , cartography
Returns to scale and scale elasticity are two important issues in the field of economics and operations research. Recently, estimating returns to scale and scale elasticity using tools such as data envelopment analysis (DEA) has attracted considerable attention among researchers. The existing approaches to calculate scale elasticity in DEA context, assume all inputs and outputs are real-valued and in this sense, the underlying technology is a continuous set. In many real cases, however, we face input/output measures that are restricted to be integer-valued. Scale properties of frontier points in such cases are interesting and important. In this paper, this problem in integer-valued DEA is studied. The Lagrangian dual formulation of a mixed integer linear programming problem is used to calculate the scale elasticity of a frontier point. To illustrate the real applicability of the theoretical framework, a real case on electricity distribution companies is given.