Aggregation in efficiency and productivity analysis: a brief review with new insights and justifications for constant returns to scale

Abstract

The main goal of this paper is to clarify a few important aspects about the aggregation issues in efficiency and productivity analysis. By doing so we also sketch a brief historical map on how the area of aggregation in efficiency and productivity analysis has developed to where it is now and its connection to some classic studies in economic theory. As a result, this paper also serves as a tribute to the great scholars I was lucky to learn from, Rolf Färe and Shawna Grosskopf, who made a profound impact on research in economics in general and the topic of aggregation in productivity and efficiency analysis in particular.