We introduce an ordinal model of efficiency measurement. Our primitive is a notion of efficiency that is comparative, but not cardinal
or absolute. In this framework, we postulate axioms that an ordinal
efficiency measure should satisfy. Primary among these are choice
consistency and planning consistency, which guide the measurement
of efficiency in a firm with access to multiple technologies. Other
axioms include scale invariance, strong monotonicity, and a continuity
condition. These axioms characterize a family of path-based
measures. By replacing the continuity condition with symmetry, we
obtain the coefficient of resource utilization.
Chambers, Christopher P., and Alan D. Miller.
American Economic Journal: Microeconomics,
Production; Cost; Capital; Capital, Total Factor, and Multifactor Productivity; Capacity
Welfare Economics: General