Input Aggregation and Firm Efficiency

Technical efficiencies calculated using aggregated inputs are biased. It is shown empirically and analytically that input aggregation decreases calculated technical efficiencies and changes relative technical efficiencies among firms. Moreover, aggregation fails to separate technical efficiency effects from allocative efficiency effects. Thus, the calculated efficiencies are more properly economic efficiencies.


Issue Date:
1989-06
Publication Type:
Working or Discussion Paper
PURL Identifier:
http://purl.umn.edu/187073
Total Pages:
17




 Record created 2017-04-01, last modified 2017-04-26

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