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The Economic Research Institute, Stockholm School of Economics SSE/EFI Working Paper Series in Economics and Finance

No 90:
Alternative Approaches to Estimate Returns to Scale in DEA- Models

Mickael Löthgren () and Magnus Tambour ()

Abstract: This paper presents a number of approaches to estimate returns to scale properties of general multiple-input muliple-output technologies. Both qualitative scale efficiency-properties and quantitative scale elasticity-properties are covered. The estimation approaches considered are based on data envelopment analysis (DEA)-models using primal production data on inputs and outputs. We propose an approach to estimate scale elasticity based on the primal efficiency problem. This alternative approach is derived as a direct approximation of the differentials of the efficiency measures in the scale elasticity definition. The different approaches to estimate scale efficiency and scale elasticity are exemplified and compared using a small dataset.

Keywords: Data envelopment analysis; scale efficiency; scale elasticity; dual linear programming; (follow links to similar papers)

JEL-Codes: D24; (follow links to similar papers)

23 pages, January 1996

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