model_profit function

Profit efficiency DEA model.

Cost, revenue and profit efficiency DEA models.

model_profit(datadea,
             dmu_eval = NULL,
             dmu_ref = NULL,
             price_input = NULL,
             price_output = NULL,
             rts = c("crs", "vrs", "nirs", "ndrs", "grs"),
             L = 1,
             U = 1,
             restricted_optimal = TRUE,
             returnlp = FALSE,
             ...)

Arguments

• datadea: A deadata object, including n DMUs, m inputs and s outputs.

• dmu_eval: A numeric vector containing which DMUs have to be evaluated. If NULL (default), all DMUs are considered.

• dmu_ref: A numeric vector containing which DMUs are the evaluation reference set. If NULL (default), all DMUs are considered.

• price_input: Unit prices of inputs for cost or profit efficiency models. It is a value, vector of length m, or matrix m x ne (where ne

  is the length of dmu_eval).

• price_output: Unit prices of outputs for revenue or profit efficiency models. It is a value, vector of length s, or matrix s x ne.

• rts: A string, determining the type of returns to scale, equal to "crs" (constant), "vrs" (variable), "nirs" (non-increasing), "ndrs" (non-decreasing) or "grs" (generalized).

• L: Lower bound for the generalized returns to scale (grs).

• U: Upper bound for the generalized returns to scale (grs).

• restricted_optimal: Logical. If it is TRUE, the optimal inputs are restricted to be <= inputs (for cost efficiency models) or the optimal outputs are restricted to be >= outputs (for revenue efficiency models).

• returnlp: Logical. If it is TRUE, it returns the linear problems (objective function and constraints) of stage 1.

• ...: Ignored, for compatibility issues.

Examples

# Example 1. Replication of results in Coelli et al. (1998, p.166).
# Cost efficiency model.
data("Coelli_1998")
# Selection of prices: input_prices is the transpose where the prices for inputs are. 
input_prices <- t(Coelli_1998[, 5:6]) 

data_example1 <- make_deadata(Coelli_1998,
                              ni = 2,
                              no = 1)
result1 <- model_profit(data_example1,
                       price_input = input_prices,
                       rts = "crs", 
                       restricted_optimal = FALSE) 
# notice that the option by default is restricted_optimal = TRUE
efficiencies(result1)

# Example 2. Revenue efficiency model.
data("Coelli_1998")
# Selection of prices for output: output_prices is the transpose where the prices for outputs are. 
output_prices <- t(Coelli_1998[, 7]) 
data_example2 <- make_deadata(Coelli_1998,
                             ni = 2,
                             no = 1)
result2 <- model_profit(data_example2,
                       price_output = output_prices,
                       rts = "crs", 
                       restricted_optimal = FALSE) 
# notice that the option by default is restricted_optimal = TRUE
efficiencies(result2)

# Example 3. Profit efficiency model.
data("Coelli_1998")
# Selection of prices for inputs and outputs: input_prices and output_prices are 
# the transpose where the prices (for inputs and outputs) are. 
input_prices <- t(Coelli_1998[, 5:6]) 
output_prices <- t(Coelli_1998[, 7]) 
data_example3 <- make_deadata(Coelli_1998,
                              ni = 2,
                              no = 1)
result3 <- model_profit(data_example3,
                        price_input = input_prices,
                        price_output = output_prices,
                        rts = "crs", 
                        restricted_optimal = FALSE) 
# notice that the option by default is restricted_optimal = TRUE
efficiencies(result3)

References

Coelli, T.; Prasada Rao, D.S.; Battese, G.E. (1998). An introduction to efficiency and productivity analysis. Jossey-Bass, San Francisco, pp 73–104. tools:::Rd_expr_doi("10.1002/ev.1441")

See Also

model_deaps, model_nonradial, model_sbmeff

Author(s)

Vicente Coll-Serrano (vicente.coll@uv.es ). Quantitative Methods for Measuring Culture (MC2). Applied Economics.

Vicente Bolós (vicente.bolos@uv.es ). Department of Business Mathematics

Rafael Benítez (rafael.suarez@uv.es ). Department of Business Mathematics

University of Valencia (Spain)