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Weak Disposability in Nonparametric Production Analysis: Reply to Färe and Grosskopf
Authors:Timo  Kuosmanen and Victor  Podinovski
Institution:Timo Kuosmanen is professor at the Economic Research Unit, MTT Agrifood Research Finland. Victor Podinovski is associate professor at Warwick Business School, University of Warwick, UK.
Abstract:Färe and Grosskopf (this issue) claim that a single abatement factor suffices for modeling weak disposability in nonparametric production models, and that the Kuosmanen (2005) technology that uses multiple abatement factors is larger than necessary. This article demonstrates by a numerical example that a single abatement factor does not suffice to capture all feasible production plans, and that its use leads to the violation of convexity, one of the maintained assumptions of the model. We also prove that the Kuosmanen technology is the correct minimum extrapolation technology under the stated axioms.
Keywords:activity analysis  data envelopment analysis (DEA)  environmental performance analysis  nonparametric productivity analysis  pollution abatement  production theory  undesirable outputs
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