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Cost-Efficiency Indicators

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Encyclopedia of Quality of Life and Well-Being Research

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Synonyms

Cost performance index (CPI); Cost-efficiency Farrell indexes; Economic performance indicator

Definition

A cost-efficiency indicator is used to assess the production performance of a decision-making unit that utilizes a given amount of resources/inputs in order to produce certain output(s). Primary cost-efficiency measures include total costs per unit of output but there are different indicators that can give us an estimate of the amount of input savings that might be feasible in the production process of a firm.

Description

Cost efficiency relates to assessing the way in which inputs are combined together in the production process in order to produce a given volume of output. Usually resources/inputs include labor, capital, and intermediate inputs. Cost efficiency might be approximated by different indicators such as the ratio between the minimum cost needed to produce a certain amount of output and the actual cost that is observed. The economic performance indicator is...

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Author information

Authors and Affiliations

  1. Department of Economics, University of Peloponnese, Tripolis, Greece

    Irene Daskalopoulou

Authors
  1. Irene Daskalopoulou
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Correspondence to Irene Daskalopoulou .

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Editors and Affiliations

  1. Dipartimento di Scienze Statistiche, Sapienza Università di Roma, Roma, Roma, Italy

    Filomena Maggino

Section Editor information

  1. Department of Economics, University of Genoa, Genoa, Italy

    Matteo Corsi

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Daskalopoulou, I. (2023). Cost-Efficiency Indicators. In: Maggino, F. (eds) Encyclopedia of Quality of Life and Well-Being Research. Springer, Cham. https://doi.org/10.1007/978-3-031-17299-1_602

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