In this paper, the authors develop measures of plant capacity, plant capacity utilization, and technical change based on observed best practice performance in a given industry. These measures are calculated as solutions to linear programming problems that are closely related to those used to...

In many instances, a firm's observed production choices will not be consistent with profit maximization or cost minimization at market prices. Such firms are generally assumed to minimize cost with respect to shadow prices. The authors extend this shadow cost function approach to allow for the...