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Consistency of returns-to-scale characterizations of production frontiers with respect to model specification

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  • Podinovski, Victor V.
  • Bouzdine-Chameeva, Tatiana

Abstract

Returns-to-scale (RTS) characterizations and the underlying notion of scale elasticity are important characteristics of production frontiers, in both parametric and nonparametric methodologies of efficiency and productivity analysis. In practical applications of these methodologies, the model of technology is often experimented with and modified before it is finalized, which involves, for example, a change of the data set, incorporation, exclusion or aggregation of inputs and outputs, or experimentation with the production assumptions, or axioms, on which the model is based. While it is well-known how such modifications of technology affect the efficiency scores, their effect on the RTS characterization of the production frontier has not been sufficiently explored in the literature. In this paper we obtain several general results that clarify this issue.

Suggested Citation

  • Podinovski, Victor V. & Bouzdine-Chameeva, Tatiana, 2020. "Consistency of returns-to-scale characterizations of production frontiers with respect to model specification," European Journal of Operational Research, Elsevier, vol. 280(2), pages 609-620.
    • Handle: RePEc:eee:ejores:v:280:y:2020:i:2:p:609-620
    DOI: 10.1016/j.ejor.2019.07.043
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    Cited by:

    1. Ole Bent Olesen & Niels Christian Petersen & Victor V. Podinovski, 2022. "The structure of production technologies with ratio inputs and outputs," Journal of Productivity Analysis, Springer, vol. 57(3), pages 255-267, June.

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