Non-convex Value Efficiency Analysis
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As we have discussed and demonstrated in Chaps. 7– 9, the value efficiency analysis can be applied to input-, output-, and combined-oriented models. It is also applicable to various returns to scale assumptions (CRS, VRS, NIRS, and NDRS). However, the convex property of a production possibility set is required. Unfortunately, the extension to non-convex PPS is not straightforward. Not only the extension is theoretically interesting, it has an important practical meaning in some situations.
KeywordsEfficiency Score Convex Cone Efficiency Analysis Efficient Frontier Tangent Cone
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