A Nonparametric Cost Approach to Scale Efficiency

Abstract

Starting with Farrell & Fieldhouse (1962), a host of notiparametric models have been developed for calculation of scale efficiency. A common property of these models is that they are specified in terms of input/output data. Duality theory has taught us that technological characteristics may be analyzed from either the primal or the dual cost side. The purpose of this paper is to introduce a nonparametric dual method of calculating scale efficiency.