A toolbox for measuring heterogeneity and efficiency using zonotopes

Abstract

In this work, we describe the new command zonotope, which, by resorting to a geometry-based approach, provides a measure of productivity that fully accounts for the existing heterogeneity across firms within the same industry. The method we propose also enables assessment of the extent of multidimensional heterogeneity with applications to fields beyond that of production analysis. Finally, we detail the functioning of the software to perform the related empirical analysis, and we discuss the main computational issues encountered in its development.