The constant returns to scale assumption maintained by neoclassical theorists for justifying the black-box structure of production technology in long run does not necessarily allow one to infer that there are no scale benefits available in its sub-technologies. Most of real-life production...

Estimation of efficiency of firms in a non-competitive market characterized by heterogeneous inputs and outputs along with their varying prices is questionable when factor-based technology sets are used in data envelopment analysis (DEA). In this scenario, a value-based technology becomes an...

In non-competitive market characterized by heterogeneous firms and price uncertainty, we discuss the measurement of economies of scale and scope due to process indivisibilities arising from the task-specific production processes of multiproduct firm. Two competing DEA cost models—one based on...

This paper briefly reviews the existing methods of capacity utilization in nonparametric framework from economic perspectives, and then suggests an alternative in the light of limitations therein. In the spirit of work by Coelli et al. [Coelli, T.J., Grifell-Tatje, E., Perelman, S., 2002....

Grifell-Tatje and Lovell [Grifell-Tatje, E., Lovell, C.A.K., 1999. Profits and productivity. Management Science 45, 1177-1193] made significant contributions to the literature on the extended radial DEA framework by decomposing profit change into six mutually exclusive components. Their...

In for-profit organizations, profit efficiency decomposition is considered important since estimates on profit drivers are of practical use to managers in their decision making. Profit efficiency is traditionally due to two sources – technical efficiency and allocative efficiency. The...

Two alternative estimation models, i.e., a translog cost function and data envelopment analysis (DEA) based on a cost model are compared and contrasted in revealing scale economies in the Indian commercial banking sector. The empirical results indicate that while the translog cost model exhibits...