Article ID | Journal | Published Year | Pages | File Type |
---|---|---|---|---|
9663826 | European Journal of Operational Research | 2005 | 13 Pages |
Abstract
In this paper we propose a new measure of input allocative efficiency that we estimate using directional distance functions. Our new measure compares the gain in output if a firm reduces technical inefficiency for the direct production possibility set and the gain in output if the firm reduces technical inefficiency for the indirect production possibility set. Because the directional distance function uses a translated origin, the gain in output from an optimal reallocation of inputs can be estimated for non-radial expansions in output. We estimate efficiency for Japanese banks during 1992-1999. The gains in outputs from reducing allocative inefficiency by reallocating inputs are greater than the gains in outputs that can be attained by reducing technical inefficiency.
Related Topics
Physical Sciences and Engineering
Computer Science
Computer Science (General)
Authors
Hirofumi Fukuyama, William L. Weber,