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Distance Functions in Primal and Dual Spaces

In: Data Envelopment Analysis

Author

Listed:
  • Rolf Färe

    (Oregon State University)

  • Shawna Grosskopf

    (Department of Economics and CERE)

  • Dimitri Margaritis

    (University of Auckland)

Abstract

This chapter provides an overview of the dual measurement of efficiency by means of distance functions and their value duals, the profit, revenue and cost functions. We start by showing how the Shephard (input) distance function in quantity space is a cost function in price space and how the cost function in quantity space is a distance function in price space. We then proceed to formulate a more unifying structure that allows for the simultaneous adjustment of inputs and outputs via establishing duality between the profit function and the directional (technology) distance function which also enables us to derive duality results for the revenue and cost functions as special cases. We complete our exposition by explaining how we can implement empirically dual forms of these efficiency measures either via activity analysis accounting for environmental technologies, slack-based measures and endogenous directional vectors or via parametric methods.

Suggested Citation

  • Rolf Färe & Shawna Grosskopf & Dimitri Margaritis, 2015. "Distance Functions in Primal and Dual Spaces," International Series in Operations Research & Management Science, in: Joe Zhu (ed.), Data Envelopment Analysis, edition 127, chapter 1, pages 1-21, Springer.
  • Handle: RePEc:spr:isochp:978-1-4899-7553-9_1
    DOI: 10.1007/978-1-4899-7553-9_1
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    Cited by:

    1. Malin Song & Jianlin Wang & Jiajia Zhao & Tomas Baležentis & Zhiyang Shen, 2020. "Production and safety efficiency evaluation in Chinese coal mines: accident deaths as undesirable output," Annals of Operations Research, Springer, vol. 291(1), pages 827-845, August.
    2. Shulei Cheng & Wei Fan & Jianlin Wang, 2022. "Investigating the humanitarian labor efficiency of China: a factor-specific model," Annals of Operations Research, Springer, vol. 319(1), pages 439-461, December.

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