This article provides a method of measuring performance in the public sector, specifically performance of school districts. The technique is closely related to the family of Farrell type efficiency measures as well as data envelopment analysis (DEA). It also can be viewed as a generalization of...

The directional distance function provides a complete characterization of the production technology and, when differentiable, can be used to derive shadow prices for nonmarket outputs. A quadratic functional form and the linear programming least absolute deviations method is used to implement...

We exploit the duality between the cost function and the directional distance function in value space to recover hedonic prices of product or asset characteristics. An application is offered for 96 Oregon vineyards located in the Willamette Valley of Oregon that sold between 1995 and 2007....

In this paper we contrast the DEA and activity analysis approaches by Charnes, Cooper and Rhodes (1978) and Shephard (1970), respectively. We show that by appropriately normalizing Shephard's output price model the two approaches coincide. Copyright Kluwer Academic Publishers 2002

In 1957 Farrell demonstrated how cost inefficiency could be decomposed into two mutually exclusive and exhaustive components: technical and allocative inefficiency. This result is consequence of the fact that—as shown by Shephard—the cost function and the input distance function (the...

In his 2005 paper in this journal, Kuosmanen argues that Shephard’s specification of weak disposability in activity analysis (DEA) models is not correct. We show that Shephard’s specification does satisfy weak disposability and is the “smallest” technology to do so. Copyright 2007,...

In recent years, economists have started to move beyond calculating regulatory effects on a pollutant-by-pollutant basis since their interaction is important. In this study, we take up this issue. To allow for joint production of multiple pollutants and marketable output, we specify our...