COST EFFICIENCY IN THE UNITED-STATES STEEL-INDUSTRY - A NONPARAMETRICANALYSIS USING DATA ENVELOPMENT ANALYSIS

In this paper we use nonparametric methods to get upper and lower boun ds on the levels of technical and overall cost efficiency in the US st eel industry during the period 1958-86. Possibilities of both non-regr essive technical change and 'no technical change' have been considered . The empirical analysis shows that the competitive status of US steel producers can be greatly enhanced even within the existing technologi es if identified technical and allocative inefficiencies can be elimin ated. The evidence does not suggest that cost inefficiency in the dome stic steel industry is mainly due to diversion of resources in order t o comply with various pollution control regulations.