Efficiency measurement with a non-convex free disposal hull technology

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We investigate the basic monotonicity properties of least-distance (in)efficiency measures on the class of non-convex FDH (free disposable hull) technologies. We show that any known FDH least-distance measure violates strong monotonicity over the strongly (Pareto-Koopmans) efficient frontier. Taking this result into account, we develop a new class of FDH least-distance measures that satisfy strong monotonicity and show that the developed (in)efficiency measurement framework has a natural profit interpretation.
Original languageEnglish
JournalJournal of the Operational Research Society
Volume67
Issue number1
Pages (from-to)9–19
Number of pages11
ISSN0160-5682
DOIs
Publication statusPublished - 2016

ID: 140015672