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Families of Linear Efficiency Programs based on Debreu's Loss Function
Gerard Debreu introduced a well known radial efficiency measure which he called a ââŹĹcoefficient of resource utilization.â⏠He derived this scalar from a much less well known ââŹĹdead lossâ⏠function that characterizes the monetary value sacrificed to inefficiency, and which is to be minimized subject to a normalization condition. We use Debreuâs loss function, together with a variety of normalization conditions, to generate several popular families of linear efficiency programs. Our methodology also can be employed to generate entirely new families of linear efficiency programs.