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A GENERALIZED DISTANCE FUNCTION - aae wisc

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The document presents a generalized distance function that extends Shephard's distance functions for analyzing production efficiency. It introduces new indexes for measuring technical, allocative, and scale efficiency, along with productivity analysis. The proposed approach allows for simultaneous rescaling of inputs and outputs without the restrictive attainability assumptions of Shephard's original framework. This generalization enhances the empirical applicability of distance functions in economic analysis, providing intuitive interpretations related to average costs and revenues.

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