returns to scale

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returns to scale

the relationship between OUTPUT of a product and the quantities of FACTOR INPUTS used to produce it in the LONG RUN. Where, for example, doubling the quantity of factor inputs used results in a doubling of output then constant returns to scale’ are experienced. Where ECONOMIES OF SCALE are present, a doubling of factor inputs results in a more than proportionate increase in output. By contrast, where DISECONOMIES OF SCALE are encountered, a doubling of factor inputs results in a less than proportionate increase in output.
Collins Dictionary of Economics, 4th ed. © C. Pass, B. Lowes, L. Davies 2005
References in periodicals archive ?
It calculates the difference in technical efficiency when a firm operates under constant returns to scale (CRS) and variable returns to scale (VRS).18 The difference in both defines inefficiency in that particular DMUs operations.19
The application of output-oriented Data Envelopment Approach (DEA) is made under the condition of variable returns to scale. The results show the absolute dominance of leading private banks, viz.
This study reflects the safety performance of a state under the variable returns to scale. The SE indicates the ability of the model to select the optimal scale under the variable returns to scale.
In this study, the input-oriented variable returns to scale (VRS) model is applied for getting the TE scores in the first stage because constant returns to scale (CRS) can be employed where industries or firms operate at their optimal scale.
The average variable returns to scale (VRS) technical efficiency scores were 63%, 64%, 78%, 78% and 88% respectively during the review period.
The second part analyses the technical efficiency (Variable Returns to Scale) using the three output models.
Types of efficiency with assumption of variable returns to scale:
In this regard, this research presented an approach for analyzing DEA model with variable returns to scale, BCC, in the circumstances that data uncertainty are displayed in the form of intuitionistic fuzzy sets.
Here the nature of variable returns to scale is got by the increased limited term of [K.summation over (k=1)] [z.sub.k] = 1.
Assuming that there are N firms which produce a single output using m different inputs and the ith firm unit produces [y.sub.i] units of output applying x[k.sub.i] units of kth inputs, the variable returns to scale. The following model is a DEA Model for Technical Efficiency of the Branch studied:

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