Estimating non-convex production sets - imposing convex input sets and output sets in data envelopment analysis

In this paper, we present Data Envelopment Analysis models for estimating non-convex production sets. In contrast to the Banker et al. (Banker, R.D., Charnes, A, and Cooper, W.W., 1984. Management Science 30 (9), 1078-1092) model, these models give statistically consistent estimators for production sets that are non-convex, but do have convex input sets and/or convex output sets, as is typically assumed in micro-economic theory. In addition, these models suffer less from a finite sample error than the Free Disposable Hull (Deprins, D., Simar, L., Tulkens, H., 1984. In: Marchand, M., Pestieu, P., Tulkens, H. (Eds.), The Performance of Public Enterprises. North-Holland, Amsterdam, pp. 243-267) model. (C) 2001 Elsevier Science B.V. All rights reserved.