Bounded directional distance function models

Abstract

Bounded additive models in data envelopment analysis (DEA) under the assumption of constant returns to scale (CRS) were recently introduced in the literature (Cooper et al. in J Product Anal 35(2):85–94, 2011; Pastor et al. in J Product Anal 40:285–292, 2013; Pastor et al. in Omega 56:16–24, 2015). In this paper, we propose to extend the so far generated knowledge about bounded additive models to the family of directional distance function (DDF) models in DEA, giving rise to a completely new subfamily of bounded or partially-bounded CRS-DDF models. We finally check the new approach on a real agricultural panel data set estimating efficiency and productivity change over time, resorting to the Luenberger indicator in a context where at least one variable is naturally bounded.