Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/27098 
Year of Publication: 
2006
Series/Report no.: 
Freiberger Arbeitspapiere No. 2006/04
Publisher: 
Technische Universität Bergakademie Freiberg, Fakultät für Wirtschaftswissenschaften, Freiberg
Abstract: 
The traditional approach to measuring allocative efficiency is based on input prices, which are rarely known at the firm level. This paper proposes a new approach to measure allocative efficiency which is based on the output-oriented distance to the frontier in a profit - technical efficiency space - and which does not require information on input prices. To validate the new approach, we perform a Monte-Carlo experiment which provides evidence that the estimates of the new and the traditional approach are highly correlated. Finally, as an illustration, we apply the new approach to a sample of about 900 enterprises from the chemical industry in Germany.
Subjects: 
Allocative efficiency
data envelopment analysis
frontier analysis
technical efficiency
Monte-Carlo study
chemical industry
JEL: 
D61
L23
L25
L65
Document Type: 
Working Paper

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