Weextend Free Disposable Hull (FDH) efficiency analysis towardsthe general directional distance function framework. The profitinterpretation of directional distance functions is extendedto the non-convex FDH technologies. In addition, we derive anefficient enumerative algorithm for computing...

The axiomatic literature on technical efficiency measurement has drawn attention to the indication problem of the Debreu-Farrell (DF) measure. We follow a shadow price approach to preserve the DF benchmark while reconciling it with the Koopmans efficiency characterization. First, we define a set...

The literature on non-parametric production analysis has formulated tests for profit maximizing behavior that do not require a parametric specification of technology. Negative test results have conventionally been interpreted as inefficiency, or have been attributed to data perturbations. In...