We discuss the nonparametric approach to profit efficiency analysis at the firm and industry levels in the absence of complete price information. Two new insights are developed. First, we measure profit inefficiency in monetary terms using absolute shadow prices. Second, we evaluate all firms...

In this paper, firm profit loss is decomposed as the sum of two terms related to the output price uncertainty (price expectation error and risk preference), plus one extra term expressing technical inefficiency. We then describe the implementation of our theoretical model in a robust data...

Since Akerlof’s theory of lemons, economists have viewed quality uncertainty as an informational advantage for sellers. Drawing on frontier techniques, we propose in this paper a simple method for measuring inefficiency of both sellers and buyers in markets for goods with different levels of...

Livestock supply must challenge the growth of final demand in the developing countries. This challenge has to take into account its ecological effects since the dairy and livestock sectors are clearly pointed out as human activities which contribute significantly to environmental deterioration....

For three decades a growing interest in the modeling of desirable and undesirable outputs has led to a theoretical and methodological debate in the nonparametric literature on production technology and efficiency. The first main discussion is about the way of modeling ‘bad/undesirables’ as...

Conventional data envelopment analysis (DEA) models assume real-valued inputs and outputs. In many occasions, some inputs and/or outputs can only take integer values. In some cases, rounding the DEA solution to the nearest whole number can lead to misleading efficiency assessments and...