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Symmetric decompositions of cost variation

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  • Balk, Bert M.
  • Zofío, José L.

Abstract

In this paper a number of symmetric, empirically implementable decompositions of the cost variation (in difference and ratio form) of a production unit are developed. The components distinguished are price level change, technical efficiency change, allocative efficiency change, technological change, scale of activity change, and price structure change. Given data from a (balanced) panel of production units, all the necessary ingredients for the computation of the various decompositions can be obtained by using linear programming techniques (DEA). An application is provided.

Suggested Citation

  • Balk, Bert M. & Zofío, José L., 2020. "Symmetric decompositions of cost variation," European Journal of Operational Research, Elsevier, vol. 285(3), pages 1189-1198.
    • Handle: RePEc:eee:ejores:v:285:y:2020:i:3:p:1189-1198
    DOI: 10.1016/j.ejor.2020.02.034
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    References listed on IDEAS

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    Cited by:

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    4. Barbero, Javier & Zofío, José L., 2023. "The measurement of profit, profitability, cost and revenue efficiency through data envelopment analysis: A comparison of models using BenchmarkingEconomicEfficiency.jl," Socio-Economic Planning Sciences, Elsevier, vol. 89(C).

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