Scale elasticity in the presence of integer data: An application to electricity distribution companies
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Amirmohammadi, Homeira ; Amirteimoori, Alireza Amir [1] ; Kordrostami, Sohrab ; Vaez-Ghasemi, Mohsen
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[1] Full professor in applied mathematics,
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- Localización: Estudios de economía aplicada, ISSN 1133-3197, ISSN-e 1697-5731, Vol. 39, Nº 2, 2021 (Ejemplar dedicado a: Globalization of trade and its impact on economy)
- Idioma: inglés
- Texto completo no disponible (Saber más ...)
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Resumen
Returns to scale and scale elasticity are two important issues in the field of economics and operations research. Recently, estimating returns to scale and scale elasticity using tools such as data envelopment analysis (DEA) has attracted considerable attention among researchers. The existing approaches to calculate scale elasticity in DEA context, assume all inputs and outputs are real-valued and in this sense, the underlying technology is a continuous set. In many real cases, however, we face input/output measures that are restricted to be integer-valued. Scale properties of frontier points in such cases are interesting and important. In this paper, this problem in integer-valued DEA is studied. The Lagrangian dual formulation of a mixed integer linear programming problem is used to calculate the scale elasticity of a frontier point. To illustrate the real applicability of the theoretical framework, a real case on electricity distribution companies is given.
