Directional Distance Functions and Rate-of-Return Regulation. (9th July 2012)

• Record Type: Journal Article
• Authors: Aparicio, Juan; Pastor, Jesus T.
• Other Names: Schellhorn Henry Academic Editor.
• Is Part Of: Advances in decision sciences. Volume 2012(2012)
• Publication Date: 2012-07-09
• Subjects: Decision making -- Periodicals; Decision making; Electronic journals; Periodicals; 519
• DOI: 10.1155/2012/731497
• Languages: English
• ISSNs: 2090-3359

Abstract

Abstract : This paper is concerned with formulating directional distance functions assuming that firms operate subject to rate-of-return regulation. To this end, we consider two different contexts. First, we assume that input prices are known, which allows us to extend the rate of return regulated version of Farrell efficiency. Secondly, we assume that input prices are unknown, showing then that a specific reference direction arises as a natural choice for measuring efficiency with directional distance functions.