Advances in Cost Frontier Analysis of the Firm

Lovell, C.A. Knox and Grifell-Tatje, Emili (2013). Advances in Cost Frontier Analysis of the Firm. In Christopher R. Thomas and William Shughart (Ed.), The Oxford Handbook of Managerial Economics (pp. 1-18) London, United Kingdom: Oxford University Press. doi:10.1093/oxfordhb/9780199782956.013.0004

Author Lovell, C.A. Knox
Grifell-Tatje, Emili
Title of chapter Advances in Cost Frontier Analysis of the Firm
Title of book The Oxford Handbook of Managerial Economics
Place of Publication London, United Kingdom
Publisher Oxford University Press
Publication Year 2013
Sub-type Research book chapter (original research)
DOI 10.1093/oxfordhb/9780199782956.013.0004
Open Access Status
Year available 2013
ISBN 9780199782956
Editor Christopher R. Thomas
William Shughart
Chapter number 4
Start page 1
End page 18
Total pages 19
Total chapters 25
Collection year 2013
Language eng
Formatted Abstract/Summary
We study various analytical frameworks relating productivity change to change in the cost structure and cost efficiency of the firm. We begin by motivating a focus on the cost side, and not the revenue side, of the profit objective of the firm. We continue by relating the cost accounting tool of standard cost variance analysis to the economics tool of cost efficiency analysis. We focus on managerially controllable drivers of cost efficiency, including productivity change and its components. We conclude by noting some significant empirical applications of the analysis, by recommending cost efficiency analysis as a valuable tool for benchmarking against the best, and by suggesting some new directions for research.
Keyword Cost variance analysis
Cost variance drivers
Cost frontier analysis
Unit cost frontiers
Unit labor cost frontiers
Q-Index Code B1
Q-Index Status Provisional Code
Institutional Status UQ

Document type: Book Chapter
Collection: School of Economics Publications
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Created: Mon, 09 Mar 2015, 14:08:04 EST by Tammy Crealy on behalf of School of Economics