Allocative efficiency measurement revisited: Do we really need input prices?

Oleg Badunenko, Michael Fritsch and Andreas Stephan

No 2006,7, Working Paper Series from European University Viadrina Frankfurt (Oder), The Postgraduate Research Programme Capital Markets and Finance in the Enlarged Europe

Abstract: The traditional approach to measuring allocative efficiency is based on input prices, which are rarely known at the firm level. This paper proposes a new approach to measure allocative efficiency which is based on the output-oriented distance to the frontier in a profit?technical efficiency space-and which does not require information on input prices. To validate the new approach, we perform a Monte-Carlo experiment which provides evidence that the estimates of the new and the traditional approach are highly correlated. Finally, as an illustration, we apply the new approach to a sample of about 900 enterprises from the chemical industry in Germany.

Keywords: allocative efficiency; data envelopment analysis; frontier analysis; technical efficiency; Monte-Carlo study; chemical industry (search for similar items in EconPapers)
JEL-codes: D61 L23 L25 L65 (search for similar items in EconPapers)
Date: 2006
References: Add references at CitEc
Citations: View citations in EconPapers (1)

Downloads: (external link)
https://www.econstor.eu/bitstream/10419/22112/1/p72006.pdf (application/pdf)

Related works:
Journal Article: Allocative efficiency measurement revisited--Do we really need input prices? (2008)
Working Paper: Allocative Efficiency Measurement Revisited: Do We Really Need Input Prices? (2006)
Working Paper: Allocative efficiency measurement revisited: do we really need input prices? (2006)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:zbw:euvgra:20067

Access Statistics for this paper

More papers in Working Paper Series from European University Viadrina Frankfurt (Oder), The Postgraduate Research Programme Capital Markets and Finance in the Enlarged Europe Contact information at EDIRC.
Bibliographic data for series maintained by ZBW - Leibniz Information Centre for Economics ().