Economics, Econometrics and Finance
4 years ago

Aggregated inputs may lead to lower technical efficiency measures, impacting productivity.

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RePEc: Research Papers in Economics
A Note on Measuring Technical Efficiency
Loren W. Tauer

Paper Summary

The article suggests that what is often seen as technical inefficiency in research may actually be a different type of inefficiency called allocative inefficiency. When inputs are combined, any allocative inefficiency shows up as technical inefficiency. The more things are grouped together, the lower the technical efficiency seems to be.

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