Measuring scale effects in the allocative profit efficiency |
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Authors: | José L. Ruiz Inmaculada Sirvent |
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Affiliation: | Centro de Investigación Operativa, Universidad Miguel Hernández, Avd. de la Universidad s/n, 03202-Elche (Alicante), Spain |
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Abstract: | This paper provides an approach to the measurement of the “scale effects” in the allocative profit efficiency. To be specific, we evaluate the improvements of profit that can be accomplished by means of a change in the scale size, once technical efficiency is achieved. New decompositions of the allocative efficiency into a scale effect component and the corresponding residual mix effect component are derived. |
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