The goal of this paper is to reveal the links among several seemingly
unrelated literatures: 1) the nonparametric regularity test literature
(see Afriat, 1972; Diewert and Parkan, 1983; Hanoch and Rothschild, 1
972; Varian, 1984), 2) the efficiency measurement literature (Farrell,
1957, is the classic reference, but also included is what has been du
bbed Data Envelopment Analysis), and 3) the 'goodness-of-fit' approach
associated with Varian (1990). The unifying threads are the Shephard-
type distance function and the Mahler inequality (Mahler, 1939). Our s
ynthesis yields regularity tests of cost minimization and technical ch
ange which are nonparametric, yet provide information as to goodness-o
f-fit based on Farrell-type efficiency measures.