It follows from the definition of the distance function that it is homogeneous of degree + 1 in outputs. In addition, it is the reciprocal of Farrell's (1957) measure of output technical efficiency, which calculates "how far" an observation is from the frontier of technology: in Figure 1, Farrell output technical efficiency of (Xt, yt) = Ob/Oa. The distance function can also readily model multiple-output technology in contrast to the production function.
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