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On the Technically Efficient Organization of an Industry: A Study of U.S. Airlines (1997)

Ray, Subhash C. ; Hu, Xiaowen

Springer

Journal of productivity analysis 8 (1997), S. 5-18

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ISSN: 1573-0441

Keywords: size efficiency ; industry restructuring ; integer programming

Source: Springer Online Journal Archives 1860-2000

Topics: Economics

Notes: Abstract In nonparametric analysis of production efficiency, the focus of attention is typically on the individual firm. In this article, we evaluate efficiency in resource utilization at the industry level. We propose an integer programming model to measure the extent of input saving possible if the observed output level of the industry is allocated to an optimal number of identical firms. This approach is applied to data for U.S. airlines covering the period 1970–84. Our results confirm that there were too few airlines prior to deregulation and suggest that there were too many firms during the early years of the post-deregulation era.

Type of Medium: Electronic Resource

URL: http://dx.doi.org/10.1023/A:1007751413007

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