Salnykov, Mykhaylo and Zelenyuk, Valentin (2005): On the Commensurability of Directional Distance Functions. Published in: Techinical Report of Statistical Institute of UCL (2005)
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Shephard’s distance functions are widely used instruments for characterizing technology and for estimating efficiency in contemporary economic theory and practice. Recently, they have been generalized by the Luenberger shortage function, or Chambers-Chung-Färe directional distance function. In this study, we explore a very important property of an economic measure known as commensurability or independence of units of measurement up to scalar transformation. Our study discovers both negative and positive results for this property in the context of the directional distance function, which in turn helps us narrow down the most critical issue for this function in practice—the choice of direction of measurement.
|Item Type:||MPRA Paper|
|Original Title:||On the Commensurability of Directional Distance Functions|
|Keywords:||Directional distance functions, commensurability, efficiency|
|Subjects:||C - Mathematical and Quantitative Methods > C4 - Econometric and Statistical Methods: Special Topics > C43 - Index Numbers and Aggregation
D - Microeconomics > D2 - Production and Organizations > D24 - Production; Cost; Capital; Capital, Total Factor, and Multifactor Productivity; Capacity
|Depositing User:||Mykhaylo Salnykov|
|Date Deposited:||09. Feb 2008 10:24|
|Last Modified:||12. Feb 2013 12:30|
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