Estimation of Returns to Scale in the Presence of Undesirable (bad) Outputs in DEA when the Firm is Regulated

Subject Areas : International Journal of Data Envelopment Analysis

F .Emami ¹ , M .Rostamy malkhalifeh ² , H .Safdari ³

1 - Department of Mathematics, Shahid Rajaee Teacher University, Lavizan, Tehran, Iran. P.O.Box 16785-163
2 - Department of Mathematics, Science and Research Branch, Islamic Azad University, Tehran, Iran.
3 - Department of Mathematics, Shahid Rajaee Teacher University, Lavizan, Tehran, Iran. P.O.Box 16785-163

Received: 2014-09-08 Accepted : 2014-12-03 Published : 2014-12-03

Keywords: Returns to scale, Undesirable outputs, Regulation, Quasi-fixed inputs,

Abstract :

The calculation of RTS amounts to measuring a relationship between inputs and outputs in a production structure. There are many methods to measure RTS in the primal space or the dual space. One of the main approaches is using the multiplier on the convexity constraint. But returns to scale measurements in DEA models are affected by the presence of regulatory constraints. These additional constraints change the role played by the convexity constraint. In this paper discusses methods for determining returns to scale in the presence of undesirable (bad) outputs in the regulated environments.