Allocative Efficiency of Technically Inefficient Production Units

We discuss how to measure allocative efficiency without presuming technical efficiency. This is relevant when it is easier to introduce reallocations than improvements of technical efficiency. We compare the approach to the traditional one of assuming technical efficiency before measuring allocative efficiency. In particular, we develop necessary and sufficient conditions on the technology to ensure consistent measures and we give dual organizational interpretations of the approaches.


Issue Date:
1999
Publication Type:
Working or Discussion Paper
PURL Identifier:
http://purl.umn.edu/24217
Total Pages:
18
Series Statement:
Unit of Economics Working Paper 1999/7




 Record created 2017-04-01, last modified 2017-08-24

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