Abstract
ABSTRACT This paper is concerned primarily with the problems of estimating the production possibility parameters of multiregional economic planning models of a mathematical programming form. It reviews and illustrates a technique known as Data Envelopment Analysis (DEA) and examines the application of this technique to the problem of production function estimation. The standard use of DEA for measuring relative efficiencies of production units is noted. A method for generating input demand and output supply functions using data envelope parameters is presented. Some comments are made about the ‘missing facet problem’, which effects this method's reliability, and a procedure for avoiding the problem is outlined. An alternative approach to supply and demand function estimation based on activity coefficient data is described. Two methods for measuring the relative effectiveness of production units are also presented. Finally, a strategy for using DEA to provide a streamlined activity analysis coefficient matrix for multiregional economic planning models is suggested, and some questions on the practical application and theoretical applicability of DEA‐estimated models are considered.
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