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Stochastic Scale Elasticity

In: Stochastic Benchmarking

Author

Listed:
  • Alireza Amirteimoori

    (Rasht Branch, Islamic Azad University)

  • Biresh K. Sahoo

    (XIM University)

  • Vincent Charles

    (Pontifical Catholic University of Peru)

  • Saber Mehdizadeh

    (Rasht Branch, Islamic Azad University)

Abstract

To analyze the performance of firms (decision-making units, DMUs) in the literature, several economic concepts such as economies of scale (returns to scale, RTS), economies of scope, marginal rates of technical substitutions, etc., have been used. Banker et al. (2004) studied RTS in different DEA models. In this chapter, however, we concentrate on determining and measuring RTS. Scale elasticity (SE) is a quantitative measure of the RTS characterization of the firms operating on the production frontier, which is used to determine improvement or deterioration in their productivities by resizing their scales of operation.

Suggested Citation

  • Alireza Amirteimoori & Biresh K. Sahoo & Vincent Charles & Saber Mehdizadeh, 2022. "Stochastic Scale Elasticity," International Series in Operations Research & Management Science, in: Stochastic Benchmarking, chapter 0, pages 119-145, Springer.
    • Handle: RePEc:spr:isochp:978-3-030-89869-4_6
    DOI: 10.1007/978-3-030-89869-4_6
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