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Journal Articles Journal of the Operational Research Society Year : 2017

On Estimating Optimal Alpha-Returns to Scale

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Abstract

From a theoretical point of view, -returns to scale is a relevant alternative to traditional DEA models for estimating production technologies under global returns to scale assumptions such as strictly increasing or strictly decreasing returns to scale. However, from a methodological and empirical point of view, a remaining question is the estimation of . This contribution proposes an effective methodology to estimate an optimal value of based upon a goodness-of-fit strategy. A global method using a grid search is presented first. Second, for generalised FDH technologies, a minimum extrapolation principle is developed to estimate directly the optimal -returns from a linear program. An illustration on 63 US industries over the period 1987-2012 shows the relevancy of our approach.

Dates and versions

halshs-01794363 , version 1 (17-05-2018)

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Jean-Philippe Boussemart, Walter Briec, Hervé Leleu, Paola Ravelojaona. On Estimating Optimal Alpha-Returns to Scale. Journal of the Operational Research Society, 2017, 70 (1), pp.1-11. ⟨10.1080/01605682.2017.1418148⟩. ⟨halshs-01794363⟩
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