Returns to scale in multiplicative models in data envelopment analysis

Returns to scale in multiplicative models in data envelopment analysis

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Article ID: iaor20101512
Volume: 173
Issue: 1
Start Page Number: 195
End Page Number: 206
Publication Date: Jan 2010
Journal: Annals of Operations Research
Authors: , ,
Abstract:

One class of models introduced in DEA is called multiplicative models, in which, as shown by Banker and Maindiratta (1986), the piecewise linear frontiers usually employed in DEA are replaced by a frontier that is piecewise Cobb-Douglas(=log linear). Banker and Maindiratta introduced a model to identify the most productive scale size pattern, and Banker et al. (2004) presented a two-stage method for the identification of returns to scale (RTS) in multiplicative models. In this paper it is shown that both the RTS situation and the MPSS pattern could be determined by a single model in one step. The new method is important in the computational point of view.

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