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EFFICIENCY (OF PRODUCTION PROCESSES)

Statistics Directorate    
French Equivalent: Efficience

Definition:
Efficiency refers to the degree to which a production process reflects ‘best practice’, either in an engineering sense (‘technical efficiency’) or in an economic sense (‘allocative efficiency’).

Context:
Full technical efficiency characterises a production process where the maximum possible output has been achieved, given a fixed set of inputs and given a certain technology. Full allocative efficiency prevails when the input-output combination is cost- minimising and/or profit maximising.

Source Publication:
OECD Productivity Manual: A Guide to the Measurement of Industry-Level and Aggregate Productivity Growth, OECD, Paris, March 2001, Annex 1 – Glossary.

Hyperlink:
http://www.oecd.org/dataoecd/59/29/2352458.pdf

Statistical Theme: National accounts

Created on Tuesday, September 25, 2001

Last updated on Monday, April 28, 2003