Title: Multi-output profit efficiency and directional distance functions
Authors: Cherchye, Laurens
De Rock, Bram
Walheer, Barnabé
Issue Date: Nov-2014
Publisher: KU Leuven CES
Series Title: CES - Discussion paper series, DPS14.32 pages:1-24
Abstract: We extend a recently developed DEA methodology for cost efficiency analysis towards profit efficiency settings. This establishes a novel DEA toolkit for profit efficiency assessments in situations with multiple inputs and multiple outputs. A distinguishing feature of our methodology is that it assumes output-specific production technologies. In addition, the methodology accounts for the use of joint inputs, and explicitly includes information on the allocation of inputs to individual outputs. We also establish a dual relationship between our multi-output profit inefficiency measure and a technical inefficiency measure that takes the form of a multi-output directional distance function. Finally, we demonstrate the empirical usefulness of our methodology by an empirical application to a large service company.
Publication status: published
KU Leuven publication type: IR
Appears in Collections:Research Center of Public Economics, Leuven
Faculty of Business and Economics, Campus Kulak Kortrijk – miscellaneous
Faculty of Economics and Business, Leuven - miscellaneous

Files in This Item:
File Description Status SizeFormat
DPS1432.pdf Published 401KbAdobe PDFView/Open


All items in Lirias are protected by copyright, with all rights reserved.