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Axiomatic modeling of fixed proportion technologies

Xun Zhou, Timo Kuosmanen

arXiv 18 Apr 2024 · Econometrics

arXiv:2404.12462 · PDF · DOI · OpenAlex · Extracted main text

Abstract

Understanding input substitution and output transformation possibilities is critical for efficient resource allocation and firm strategy. There are important examples of fixed proportion technologies where certain inputs are non-substitutable and/or certain outputs are non-transformable. However, there is widespread confusion about the appropriate modeling of fixed proportion technologies in data envelopment analysis. We point out and rectify several misconceptions in the existing literature, and show how fixed proportion technologies can be correctly incorporated into the axiomatic framework. A Monte Carlo study is performed to demonstrate the proposed solution.

Citation extraction

24
references
61
in-text mentions
24
distinct cited
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self-citations
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main-text words

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Most heavily cited references

The works this paper leans on most, across its whole bibliography — not restricted to papers in our corpus. Ranked by composite intensity, which combines how often a work is mentioned, how many sections mention it, and how much of that falls in the main text rather than the appendix.

ReferenceIntensityMentionsSectionsMain text
1Barnum, Darold, Gleason, John (2011) Measuring efficiency under fixed proportion technologies1.000273100%
2Afriat, S. N (1972) Efficiency Estimation of Production Functions0.92844100%
3Barnum, Darold, Coupet, Jason, Gleason, John, McWilliams, Abagail, P… (2017) Impact of input substitution and output transformation on data envelopment analysis decisions0.92843100%
4Koopmans, Tjalling Charles, Koopmans, Tjalling Charles (1951) An analysis of production as an efficient combination of activities0.84333100%
5Charnes, A., Cooper, W. W., Rhodes, E (1978) Measuring the efficiency of decision making units0.64422100%
6Diewert, W. E (1971) An Application of the Shephard Duality Theorem: A Generalized Leontief Production Function0.64422100%
7Leontief, Wassily W (1941) The Structure of the American Economy, 1919–19290.64422100%
8Allen, R., Athanassopoulos, A., Dyson, R. G., Thanassoulis, E (1997) Weights restrictions and value judgements in Data Envelopment Analysis: Evolution, development and future directions0.40511100%
9Banker, Rajiv D (1993) Maximum Likelihood, Consistency and Data Envelopment Analysis: A Statistical Foundation0.40511100%
10Boyabatlı, Onur (2015) Supply Management in Multiproduct Firms with Fixed Proportions Technology0.40511100%

Showing the top 10 of 24 scored citations.