Intertemporal Production Frontiers: With Dynamic DEA
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INTERTEMPORAL PRODUCTION FRONTIERS: WITH DYNAMIC DEA
Rolf Fare and Shawna Grosskopf
Southern Illinois University at Carbondale Carbondale, Illinois 62901
In Collaboration with: R. Brannlund, Y. He, J. Horvath, P. Roos, G. Whittaker and S. Yaisawarng
KLUWER ACADEMIC PUBLISHERS Boston/London/Dordrecht
Distributors for North America: Kluwer Academic Publishers 101 Philip Drive Assinippi Park Norwell, Massachusetts 02061 USA Distributors for all other countries: Kluwer Academic Publishers Group Distribution Centre Post Office Box 322 3300 AH Dordrecht, THE NETHERLANDS Library of Congress Cataloging-in-Publication Data
A C.I.P. Catalogue record for this book is available from the Library of Congress.
ISBN-13: 978-94-010-7309-7 DOl: 10.1007/978-94-009-1816-0
Copyright
©
e-ISBN-13: 978-94-009-1816-0
1996 by Kluwer Academic Publishers
Softcover reprint of the hardcover I st edition 1996 All rights reserved. No part of this publication may be reproduced, stored in a retrieval system or transmitted in any form or by any means, mechanical, photo-copying, recording, or otherwise, without the prior written permission of the publisher, Kluwer Academic Publishers, 101 Philip Drive, Assinippi Park, Norwell, Massachusetts 02061. Printed on acid-free paper.
v
To W.W. Cooper
CONTENTS
LIST OF FIGURES
xi
PREFACE 1
2
3
xiii
INTRODUCTION 1.1 Motivation 1.2 Connection to Earlier Work 1.3 Production and Time STATIC PRODUCTION STRUCTURE 2.1 Technology Axioms 2.2 The Activity Analysis Model 2.3 A Model with Intermediate Inputs 2.4 Optimization 2.5 Environmental Regulation and Profitability 2.6 Notes on the Literature 2.A Appendix DISTANCE FUNCTIONS AND PRODUCTIVITY 3.1 Distance Functions 3.2 Malmquist Productivity Indexes 3.3 The Fisher and Tornqvist Productivity Indexes 3.4 Activity Analysis and Productivity 3.5 Productivity and Quality Changes in Swedish Pharmacies vii
1 2 3
4 9 11 16
20 23 25 41 41 47 48 53 58 61
67
Vlll
Intertempoml Production Frontiers
3.6 Notes on the Literature 3.A Appendix 4
5
6
BIASED AND EMBODIED TECHNICAL CHANGE 4.1 Hicks' Neutral Technical Change 4.2 Biased Technical Change 4.3 Industrial Productivity Growth in China: 1980-84 vs. 1984-85 4.4 On Vintage Technologies 4.5 Notes on the Literature 4.A Appendix INDIRECT PRODUCTION AND INTERTEMPORAL BUDGETING 5.1 The Cost Indirect Technology 5.2 The Intertemporal Budget Constraint 5.3 The Intertemporal Cost Indirect Technology 5.4 Output-Oriented Efficiency Measures in an Intertemporal Budgeting Framework 5.5 Intertemporal Budgeting and Efficiency 5.6 Notes on the Literature DYNAMIC PRODUCTION MODELS 6.1 The Product Technology 6.2 Time Substitution 6.3 The Basic Dynamic Technology 6.4 Storable Inputs 6.5 Dynamic Measurement of Efficiency: An Application to Western Public Grazing 6.6 Notes on the Literature 6.A Appendix
81 81 85 86 91
98 110 116 117 119 120 124 128
130 134 150 151 152 155 161 165
168 186 187
Contents
IX
REFERENCES
189
SUBJECT INDEX
199
AUTHOR INDEX
201
LIST OF FIGURES
Chapter 1
1.1 1.2 1.3 1.4 1.5
Th
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