Technology Matrix
Definitions
Health Economics
- A table showing the relationship between inputs and the maximum outputs or outcomes of any procedure or process.
- synonymProduction Function (written as technology matrix)
- A technical relationship between inputs and the maximum outputs or outcomes of any procedure or process. Thus a production function may relate the maximum number of patients that can be treated in a hospital over a period of time to a variety of input flows like doctor- and nurse-hours, and beds. For econometric purposes the relationship is usually postulated to be in a particular mathematical form, of which one is the so-called Cobb-Douglas production function, X = kA a B b where X is the rate of output (or throughput of clients), k, a and b are positive constants, and A and B are rates of use of two inputs. The production function specifies efficient combinations of inputs required at each rate of output, viz ., the fewest of each needed to produce that output (see Efficiency). Depending on the values of parameters like a and b an equal proportional increase in all inputs may entail either a larger, smaller or equal increase in output. This corresponds to increasing, decreasing or constant returns to scale.
