Scandinavian Working Papers in Economics

Memorandum,
Oslo University, Department of Economics

No 15/2009: Returms-to-scale Properties in DEA Models: The Fundamental Role of Interior Points

Vladimir Krivonozhko and Finn R. Førsund ()
Additional contact information
Vladimir Krivonozhko: Institute for Systems Analysis, Academy of Sciences, Moscow
Finn R. Førsund: Dept. of Economics, University of Oslo, Postal: Department of Economics, University of Oslo, P.O Box 1095 Blindern, N-0317 Oslo, Norway

Abstract: Attempts can be found in the DEA literature to identify returns to scale at efficient interior points of the production possibility set on the basis of returns to scale at points of the corresponding reference sets. However, an opposite approach is put forward in this paper, advocating that returns-to-scale properties of efficient reference units should be found by identifying first returns to scale of an efficient interior unit that is a radial projection to the frontier of an inefficient unit. Returns-to-scale properties of both the corresponding reference units and units supporting the face in question can then be established.

Keywords: Returns to scale; DEA; Interior points; Vertices

JEL-codes: C61; D20

22 pages, August 4, 2009

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Published as
Vladimir Krivonozhko, Finn R. Førsund and Andrey V. Lychev, (2012), 'Returms-to-scale Properties in DEA Models: The Fundamental Role of Interior Points', Journal of productivity analysis, vol 38, pages 121-130

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