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Title:Farrell revisited: Visualising the DEA production frontier PDF Logo
Authors:Førsund, Finn R.
Kittelsen, Sverre A. C.
Krivonozhko, Vladimir E.
Issue Date:2007
Series/Report no.:Memorandum, Department of Economics, University of Oslo 2007,15
Abstract:The contributions of the paper are threefold: i) compare with mathematical rigour the Charnes, Cooper, and Rhodes DEA model and the Farrell model exhibiting constant returns to scale, ii) reinterpret the contribution of Farrell and Fieldhouse that extended the analysis to variables returns to scale and establish the connection with the approach in Banker, Charnes and Cooper, iii) provide graphical visualisation of properties of the frontier function. Both papers by Farrell emphasised the importance of graphical visualisation of non-parametric frontier functions, but, to our knowledge, this is seldom followed up in the literature. We use a graphical package (EffiVision) with a numerical representation of the frontier functions, representing the contemporary development of visualisation. By making suitable cuts through the DEA frontier in multidimensional space, various graphical representations of features of economic interest can be done. Development of ray average cost function and scale elasticity are novel illustrations.
Subjects:Farrell efficiency measure
DEA
variable returns to scale
visualisation
grouping method
JEL:C61
D24
Document Type:Working Paper
Appears in Collections:Memorandum, Department of Economics, University of Oslo

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