TESTING FOR INVERSE HOMOTHETICITY: A NONPARAMETRIC APPROACH |
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| Authors: | HIROFUMI FUKUYAMA&dagger , WILLIAM L. WEBER&Dagger |
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| Affiliation: | Fukuoka University, Japan;Southeast Missouri State University |
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| Abstract: | The efficiency of a decision-making unit can be estimated relative to the direct output possibility set or the indirect (cost-constrained) output possibility set. For the direct and indirect output sets we show that the ratio of two Farrell (radial) efficiency measures equals the ratio of two Zieschang (non-radial) efficiency measures if and only if the production technology is inverse-homothetic. A consequence of inverse homotheticity is that the input and output expansion paths are linear. |
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