In this paper a number of symmetric, empirically implementable decompositions of the cost variation (in difference and ratio form) of a production unit are developed. The components distinguished are price level change, technical efficiency change, allocative efficiency change, technological change, scale of activity change, and price structure change. Given data from a (balanced) panel of production units, all the necessary ingredients for the computation of the various decompositions can be obtained by using linear programming techniques (DEA). An application is provided.

Cost variation, Decomposition, Efficiency change, Productivity and competitiveness, Technological change,
European Journal of Operational Research
Rotterdam School of Management (RSM), Erasmus University

Balk, B.M, & Zofio Prieto, J.L. (2020). Symmetric decompositions of cost variation. European Journal of Operational Research, 285, 1189–1198. doi:10.1016/j.ejor.2020.02.034