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On constant elasticity of substitution – Constant elasticity of transformation Directional Distance Functions

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  • Ravelojaona, Paola

Abstract

This paper aims to present non-linear CES (Constant Elasticity of Substitution)–CET (Constant Elasticity of Transformation) Directional Distance Functions. These measures inherit the structure of the standard Directional Distance Functions and that of the CES–CET technology. These functions allow non-parametric estimation of efficiency scores through linear programming method. Besides, the CES –CET technology gives the opportunity to explore α-returns to scale assumption for the new distance functions. The duality theory is investigated through pseudo profit, cost and revenue functions. The dual standpoint provides non-linear adjusted prices that can occur into non-linear pricing practices. An application is proposed to give an illustrative example of the primal CES–CET Directional Distance Functions.

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  • Ravelojaona, Paola, 2019. "On constant elasticity of substitution – Constant elasticity of transformation Directional Distance Functions," European Journal of Operational Research, Elsevier, vol. 272(2), pages 780-791.
    • Handle: RePEc:eee:ejores:v:272:y:2019:i:2:p:780-791
    DOI: 10.1016/j.ejor.2018.07.020
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    1. Noah J Miller & Jason S Bergtold & Allen M Featherstone, 2019. "Economic elasticities of input substitution using data envelopment analysis," PLOS ONE, Public Library of Science, vol. 14(8), pages 1-15, August.
    2. Chen, Lei & Wang, Ying-Ming, 2020. "DEA target setting approach within the cross efficiency framework," Omega, Elsevier, vol. 96(C).
    3. Walter Briec & Marc Dubois & Stéphane Mussard, 2019. "Technical Efficiency in Firm Games with Constant Returns to Scale and α-Returns to Scale," Working Papers hal-02344310, HAL.
    4. Briec, Walter & Mussard, Stéphane, 2020. "Improvement of technical efficiency of firm groups," European Journal of Operational Research, Elsevier, vol. 283(3), pages 991-1001.
    5. Walter Briec & Kristiaan Kerstens & Ignace Van de Woestyne, 2022. "Nonconvexity in Production and Cost Functions: An Exploratory and Selective Review," Springer Books, in: Subhash C. Ray & Robert G. Chambers & Subal C. Kumbhakar (ed.), Handbook of Production Economics, chapter 18, pages 721-754, Springer.
    6. Mussard, Stéphane & Pi Alperin, María Noel, 2021. "Accounting for risk factors on health outcomes: The case of Luxembourg," European Journal of Operational Research, Elsevier, vol. 291(3), pages 1180-1197.
    7. Walter Briec & Marc Dubois & Stéphane Mussard, 2021. "Technical efficiency in firm games with constant returns to scale and $$\alpha $$ α -returns to scale," Annals of Operations Research, Springer, vol. 304(1), pages 35-62, September.
    8. Maolin Cheng, 2019. "A Grey CES Production Function Model and Its Application in Calculating the Contribution Rate of Economic Growth Factors," Complexity, Hindawi, vol. 2019, pages 1-8, April.

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