Input Aggregation and Firm Efficiency

Technical efficiencies calculated using aggregated inputs are biased. It is shown empirically and analytically that input aggregation decreases calculated technical efficiencies and changes relative technical efficiencies among firms. Moreover, aggregation fails to separate technical efficiency effects from allocative efficiency effects. Thus, the calculated efficiencies are more properly economic efficiencies.

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Year of publication:	1989-06
Authors:	Thomas, Arthur C. ; Tauer, Loren W.
Institutions:	Charles H. Dyson School of Applied Economics and Management, Cornell University
Subject:	Production Economics \| Productivity Analysis

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Extent:	application/pdf
Series:	Staff Papers.
Type of publication:	Book / Working Paper
Notes:	The text is part of a series Department of Applied Economics and Management>Staff Papers Number 187073
Source:	RePEc - Research Papers in Economics

Persistent link: https://www.econbiz.de/10010937721