Arbeitspapier
Allocative efficiency measurement revisited: Do we really need input prices?
The traditional approach to measuring allocative efficiency is based on input prices, which are rarely known at the firm level. This paper proposes a new approach to measure allocative efficiency which is based on the output-oriented distance to the frontier in a profit?technical efficiency space-and which does not require information on input prices. To validate the new approach, we perform a Monte-Carlo experiment which provides evidence that the estimates of the new and the traditional approach are highly correlated. Finally, as an illustration, we apply the new approach to a sample of about 900 enterprises from the chemical industry in Germany.
- Language
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Englisch
- Bibliographic citation
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Series: Working Paper Series ; No. 2006,7
- Classification
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Wirtschaft
Organization of Production
Chemicals; Rubber; Drugs; Biotechnology; Plastics
Allocative Efficiency; Cost-Benefit Analysis
Firm Performance: Size, Diversification, and Scope
- Subject
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allocative efficiency
data envelopment analysis
frontier analysis
technical efficiency
Monte-Carlo study
chemical industry
- Event
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Geistige Schöpfung
- (who)
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Badunenko, Oleg
Fritsch, Michael
Stephan, Andreas
- Event
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Veröffentlichung
- (who)
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European University Viadrina, The Postgraduate Research Programme: Capital Markets and Finance in the Enlarged Europe
- (where)
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Frankfurt (Oder)
- (when)
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2006
- Handle
- Last update
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10.03.2025, 11:44 AM CET
Data provider
ZBW - Deutsche Zentralbibliothek für Wirtschaftswissenschaften - Leibniz-Informationszentrum Wirtschaft. If you have any questions about the object, please contact the data provider.
Object type
- Arbeitspapier
Associated
- Badunenko, Oleg
- Fritsch, Michael
- Stephan, Andreas
- European University Viadrina, The Postgraduate Research Programme: Capital Markets and Finance in the Enlarged Europe
Time of origin
- 2006