IDEAS home Printed from https://ideas.repec.org/a/spr/jbecon/v89y2019i6d10.1007_s11573-019-00939-0.html
   My bibliography  Save this article

Multi-criteria production theory: convexity propositions and reasonable axioms

Author

Listed:
  • Harald Dyckhoff

    (Operations Management, RWTH Aachen University)

Abstract

Multi-criteria production theory is a generalization of traditional production theories that can be utilized to expand knowledge on the theory and practice of non-financial performance analysis. Based on decision theory, its main idea is the capability of strictly distinguishing technologically determined inputs and outputs of a production system’s activity from its desired or undesired impacts on artificial or natural environments in the form of generalized benefits and costs. For the special cases of linear and of monotonic multiple cost and benefit functions, a recent paper in this journal proves first main propositions and applies them to some topics often discussed in the literature. This paper extends these results. General theorems for convex production possibility sets, convex cost functions, and concave benefit functions are proven, and it is shown that some technological assumptions, which are usual in economics and data envelopment analysis, particularly those on strong disposability, are unessential for efficiency measurement or even unrealistic, whereas a newly introduced axiom of value disposability may be reasonable.

Suggested Citation

  • Harald Dyckhoff, 2019. "Multi-criteria production theory: convexity propositions and reasonable axioms," Journal of Business Economics, Springer, vol. 89(6), pages 719-735, August.
    • Handle: RePEc:spr:jbecon:v:89:y:2019:i:6:d:10.1007_s11573-019-00939-0
    DOI: 10.1007/s11573-019-00939-0
    as

    Download full text from publisher

    File URL: http://link.springer.com/10.1007/s11573-019-00939-0
    File Function: Abstract
    Download Restriction: Access to the full text of the articles in this series is restricted.
    File URL: https://libkey.io/10.1007/s11573-019-00939-0?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Baumgartner, Stefan & Dyckhoff, Harald & Faber, Malte & Proops, John & Schiller, Johannes, 2001. "The concept of joint production and ecological economics," Ecological Economics, Elsevier, vol. 36(3), pages 365-372, March.
    2. Jeanneaux, Philippe & Latruffe, Laure, 2016. "Modelling pollution-generating technologies in performance benchmarking: Recent developments, limits and future prospects in the nonparametric frameworkAuthor-Name: Dakpo, K. Hervé," European Journal of Operational Research, Elsevier, vol. 250(2), pages 347-359.
    3. Victoria Wojcik & Harald Dyckhoff & Sebastian Gutgesell, 2017. "The desirable input of undesirable factors in data envelopment analysis," Annals of Operations Research, Springer, vol. 259(1), pages 461-484, December.
    4. AGRELL, Per J. & HATAMI-MARBINI, Adel, 2013. "Frontier-based performance analysis models for supply chain management: state of the art and research directions," LIDAM Reprints CORE 2555, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
    5. W. Liu & W. Meng & X. Li & D. Zhang, 2010. "DEA models with undesirable inputs and outputs," Annals of Operations Research, Springer, vol. 173(1), pages 177-194, January.
    6. Tarja Joro & Pekka J. Korhonen, 2015. "Extension of Data Envelopment Analysis with Preference Information," International Series in Operations Research and Management Science, Springer, edition 127, number 978-1-4899-7528-7, April.
    7. Harald Dyckhoff, 2018. "Multi-criteria production theory: foundation of non-financial and sustainability performance evaluation," Journal of Business Economics, Springer, vol. 88(7), pages 851-882, September.
    8. Tarja Joro & Pekka J. Korhonen, 2015. "Data Envelopment Analysis," International Series in Operations Research & Management Science, in: Extension of Data Envelopment Analysis with Preference Information, edition 127, chapter 0, pages 15-26, Springer.
    9. Dyckhoff, H. & Allen, K., 2001. "Measuring ecological efficiency with data envelopment analysis (DEA)," European Journal of Operational Research, Elsevier, vol. 132(2), pages 312-325, July.
    10. R. D. Banker & A. Charnes & W. W. Cooper, 1984. "Some Models for Estimating Technical and Scale Inefficiencies in Data Envelopment Analysis," Management Science, INFORMS, vol. 30(9), pages 1078-1092, September.
    11. Kleine, A., 2004. "A general model framework for DEA," Omega, Elsevier, vol. 32(1), pages 17-23, February.
    12. Tone, Kaoru, 2001. "A slacks-based measure of efficiency in data envelopment analysis," European Journal of Operational Research, Elsevier, vol. 130(3), pages 498-509, May.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Harald Dyckhoff & Rainer Souren, 2023. "Are important phenomena of joint production still being neglected by economic theory? A review of recent literature," Journal of Business Economics, Springer, vol. 93(6), pages 1015-1053, August.
    2. Dyckhoff, Harald & Souren, Rainer, 2022. "Integrating multiple criteria decision analysis and production theory for performance evaluation: Framework and review," European Journal of Operational Research, Elsevier, vol. 297(3), pages 795-816.
    3. Harald Dyckhoff, 2023. "Proper modelling of industrial production systems with unintended outputs: a different perspective," Journal of Productivity Analysis, Springer, vol. 59(2), pages 173-188, April.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Dyckhoff, Harald & Souren, Rainer, 2022. "Integrating multiple criteria decision analysis and production theory for performance evaluation: Framework and review," European Journal of Operational Research, Elsevier, vol. 297(3), pages 795-816.
    2. Harald Dyckhoff, 2018. "Multi-criteria production theory: foundation of non-financial and sustainability performance evaluation," Journal of Business Economics, Springer, vol. 88(7), pages 851-882, September.
    3. Victoria Wojcik & Harald Dyckhoff & Marcel Clermont, 2019. "Is data envelopment analysis a suitable tool for performance measurement and benchmarking in non-production contexts?," Business Research, Springer;German Academic Association for Business Research, vol. 12(2), pages 559-595, December.
    4. Victoria Wojcik & Harald Dyckhoff & Sebastian Gutgesell, 2017. "The desirable input of undesirable factors in data envelopment analysis," Annals of Operations Research, Springer, vol. 259(1), pages 461-484, December.
    5. Malte L. Peters & Stephan Zelewski, 2021. "Upper and lower satisficing levels in efficiency analysis: a corporate social responsibility perspective," Sustainability Nexus Forum, Springer, vol. 29(3), pages 187-195, December.
    6. Harald Dyckhoff & Rainer Souren, 2023. "Are important phenomena of joint production still being neglected by economic theory? A review of recent literature," Journal of Business Economics, Springer, vol. 93(6), pages 1015-1053, August.
    7. Harald Dyckhoff, 2023. "Proper modelling of industrial production systems with unintended outputs: a different perspective," Journal of Productivity Analysis, Springer, vol. 59(2), pages 173-188, April.
    8. Kao, Chiang & Hwang, Shiuh-Nan, 2021. "Measuring the effects of undesirable outputs on the efficiency of production units," European Journal of Operational Research, Elsevier, vol. 292(3), pages 996-1003.
    9. Trinks, Arjan & Mulder, Machiel & Scholtens, Bert, 2020. "An Efficiency Perspective on Carbon Emissions and Financial Performance," Ecological Economics, Elsevier, vol. 175(C).
    10. Taleb, Mushtaq & Khalid, Ruzelan & Ramli, Razamin & Ghasemi, Mohammad Reza & Ignatius, Joshua, 2022. "An integrated bi-objective data envelopment analysis model for measuring returns to scale," European Journal of Operational Research, Elsevier, vol. 296(3), pages 967-979.
    11. Adler, Nicole & Volta, Nicola, 2016. "Accounting for externalities and disposability: A directional economic environmental distance function," European Journal of Operational Research, Elsevier, vol. 250(1), pages 314-327.
    12. Zhou, P. & Ang, B.W. & Poh, K.L., 2008. "A survey of data envelopment analysis in energy and environmental studies," European Journal of Operational Research, Elsevier, vol. 189(1), pages 1-18, August.
    13. Zhiqiang Zhu & Xuechi Zhang & Mengqing Xue & Yaoyao Song, 2023. "Eco-Efficiency and Its Evolutionary Change under Regulatory Constraints: A Case Study of Chinese Transportation Industry," Sustainability, MDPI, vol. 15(9), pages 1-18, April.
    14. Benjamin Hampf, 2018. "Measuring inefficiency in the presence of bad outputs: Does the disposability assumption matter?," Empirical Economics, Springer, vol. 54(1), pages 101-127, February.
    15. Liang Chun Lu & Yung-ho Chiu & Shih-Yung Chiu & Tzu-Han Chang, 2022. "Do Forests help environmental development of Cities in China?," Environment, Development and Sustainability: A Multidisciplinary Approach to the Theory and Practice of Sustainable Development, Springer, vol. 24(5), pages 6602-6629, May.
    16. Noor Ramli & Susila Munisamy & Behrouz Arabi, 2013. "Scale directional distance function and its application to the measurement of eco-efficiency in the manufacturing sector," Annals of Operations Research, Springer, vol. 211(1), pages 381-398, December.
    17. Juan Aparicio & Magdalena Kapelko, 2019. "Enhancing the Measurement of Composite Indicators of Corporate Social Performance," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 144(2), pages 807-826, July.
    18. Chih-Ching Yang, 2014. "An enhanced DEA model for decomposition of technical efficiency in banking," Annals of Operations Research, Springer, vol. 214(1), pages 167-185, March.
    19. Sarkis, Joseph & Cordeiro, James J., 2012. "Ecological modernization in the electrical utility industry: An application of a bads–goods DEA model of ecological and technical efficiency," European Journal of Operational Research, Elsevier, vol. 219(2), pages 386-395.
    20. Mushtaq Taleb & Ruzelan Khalid & Ali Emrouznejad & Razamin Ramli, 2023. "Environmental efficiency under weak disposability: an improved super efficiency data envelopment analysis model with application for assessment of port operations considering NetZero," Environment, Development and Sustainability: A Multidisciplinary Approach to the Theory and Practice of Sustainable Development, Springer, vol. 25(7), pages 6627-6656, July.

    More about this item

    Keywords

    Multi-criteria decision making; Production theory; Performance analysis; Convexity properties; Efficient frontier; Disposability assumption;
    All these keywords.

    JEL classification:

    • D24 - Microeconomics - - Production and Organizations - - - Production; Cost; Capital; Capital, Total Factor, and Multifactor Productivity; Capacity
    • M21 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Economics - - - Business Economics
    • L25 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Firm Performance
    • Q51 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Valuation of Environmental Effects

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:spr:jbecon:v:89:y:2019:i:6:d:10.1007_s11573-019-00939-0. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Sonal Shukla or Springer Nature Abstracting and Indexing (email available below). General contact details of provider: http://www.springer.com .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.