Felder, Stefan:
The use of data envelopment analysis for the detection of price above the competitive level
In: Empirica : journal of european economics, Vol. 22 (1995), No. 2, pp. 103 - 113
1995article/chapter in journal
Economics
Related: 1 publication(s)
Title:
The use of data envelopment analysis for the detection of price above the competitive level
Author:
Felder, StefanUDE
LSF ID
49726
Other
connected with university
Year of publication:
1995

Abstract:

Economic theory can predict the impact of exogenous influences on the equilibrium prices in a market. However, it is difficult to measure the magnitude of such effects because the appropriate data are usually not available. In this paper a new approach to comparing prices is explored using individual firm data which are typically available. If the firms in different markets can be assumed to use the same technology, price differentials can be inferred from the estimates can be assumed to use the same technology, price differentials can be inferred from the estimates of best practice frontiers. The new approach is applied to data on the Swiss construction industry in different cantons. In some cantons the market can be said to be competitive, in others non-competitive procurement rules are expected to raise equilibrium prices. The data envelopment analysis estimates the price differential to be approximately equal to 7.5%.