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The degree and speed with which a market accurately incorporates information into prices.

Market Efficiency

The extent to which the price of an asset reflects all information available. Economists disagree on how efficient markets are. Followers of the efficient markets theory hold that the market efficiently deals with all information on a given security and reflects it in the price immediately, and that technical analysis, fundamental analysis, and/or any speculative investing based on those methods are useless. On the other hand, the primary observation of behavioral economics holds that investors (and people in general) make decisions on imprecise impressions and beliefs, rather than rational analysis, rendering markets somewhat inefficient to the extent that they are affected by people.


the relationship between the quantities of factor inputs (labour, materials, etc.) used by a firm and the quantity of output which it is able to produce using these inputs. Where a firm is able to produce the same output using fewer inputs or produce more output using the same quantity of inputs then it has improved its efficiency See PRODUCTIVITY.


the relationship between scarce FACTOR INPUTS and OUTPUTS of goods and services. This relationship can be measured in physical terms (TECHNOLOGICAL EFFICIENCY) or cost terms (ECONOMIC EFFICIENCY). The concept of efficiency is used as a criterion in judging how well MARKETS have allocated resources. See MARKET PERFORMANCE, RESOURCE ALLOCATION, ECONOMIZE.
References in periodicals archive ?
And on Long Island, Albanese just completed a major renovation to an office building using various energy efficiency measures including an ENERGY STAR[R] rated roof, Enthalpy Energy Recovery system, and other measures that are contributing to approximately 18 percent annual energy savings.
Low air-flow not only decreases the efficiency of your system, but also creates comfort problems within the home.
The maximum value, he explains, might even include a higher chemical cost, if this helps the mill achieve the best results in quality or efficiency.
In addition, Honda has a goal to improve fuel efficiency by 20% over 2005 levels for its revolutionary high expansion ratio engine that variably controls the engine's stroke length during the intake/compression and expansion/exhaust processes.
For those recyclers who would like to more closely monitor their scrap handlers' fuel efficiency, manufactures offer a couple of recommendations.
Figure 1 presents the energy dependence of the registration efficiency for the [.
In a home that needs energy improvements, the HERS report suggests efficiency upgrades, and estimates the cost of the improvements as well as expected energy savings.
To sum up, the major essence of Stein's arguments are: (i) that all talk about efficiency is just so much nonsense because efficiency can not be an end in itself.
Look for high efficiency for small particles when respiratory conditions, immune disorders or cardiovascular disease are present, and when asthma is triggered by strong odors and fumes.
The five most critical drivers are: profitable revenue growth rate; operating income margin; effective tax rate; working capital efficiency; and fixed capital efficiency.
On balance then, evidence from the event studies does not provide much support for the hypothesis that mergers are expected by the financial markets to improve bank performance because of efficiency gains or other factors.