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Staff Paper No. 422 - Abstract

A Generalized Distance Function and the Analysis of Production Efficiency

Jean-Paul Chavas [jpchavas@wisc.edu]
Thomas L. Cox [tlcox@wisc.edu]

Staff Paper No. 422, February 1999, 43p.

Abstract

A generalization of Shephard's distance functions is proposed, extending the usefulness of distance functions in economic analysis. Applications to efficiency measurements and productivity analysis are presented. New indexes of productivity, and technical, allocative and scale efficiency are proposed and analyzed. Interpretation of these indexes in terms of ray-average cost, ray-average revenue, and cost-to-revenue ratio is discussed.
Last updated on Thu, Jun 2, 2005 11:02am