On Farrell’s Decomposition and Aggregation

Fare, Rolf and Zelenyuk, Valentin (2005) On Farrell’s Decomposition and Aggregation. International Journal of Business and Economics, 4 2: 167-171.

Author Fare, Rolf
Zelenyuk, Valentin
Title On Farrell’s Decomposition and Aggregation
Journal name International Journal of Business and Economics
ISSN 1607-0704
Publication date 2005
Sub-type Article (original research)
Volume 4
Issue 2
Start page 167
End page 171
Total pages 5
Place of publication Taiwan, Republic of China
Publisher Feng Chia University
Language eng
Formatted abstract
In this paper we show that in order to aggregate individual efficiency scores into a
group (e.g., industry) efficiency score in such a way that the multiplicative structure of
further decompositions is preserved with equal weights across components, the weighted geometric mean is required. We also show how the weights can be chosen using a variation of a theorem by Koopmans (1957). In the end, our paper provides a mathematically consistent and theoretically justified way of aggregation of Farrell-type efficiency scores.
Q-Index Code CX
Q-Index Status Provisional Code
Institutional Status Non-UQ

Document type: Journal Article
Sub-type: Article (original research)
Collection: School of Economics Publications
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Created: Tue, 20 Sep 2011, 12:18:06 EST by Valentin Zelenyuk on behalf of School of Economics