Input Efficiency Measures: A Generalized, Encompassing Formulation

Abstract

In the article “Input Efficiency Measures: A Generalized, Encompassing Formulation” we develop a generalized, encompassing formulation unifying four traditional input efficiency measures: radial, Färe-Lovell, asymmetric Färe, and multiplicative Färe-Lovell. This is basically motivated by the fact that observations on production need not be situated near the efficient subset, but could also be positioned close to the isoquant or even the boundary of the technology. This new generalized Färe-Lovell input efficiency measure shares its axiomatic properties with the original Färe-Lovell input efficiency measure. In addition, we can derive new dual interpretations for this generalized Färe-Lovell input efficiency measure. Finally, we derive mathematical programming formulations, with a special focus on cases where linear programming applies.