To link to full-text access for this article, visit this link: http://dx.doi.org/10.1016/j.ejor.2004.05.008 Byline: Petros Hadjicostas (a), Andreas C. Soteriou (b) Keywords: Data envelopment analysis; Returns to scale; One-sided elasticities; Multi-output production Abstract: One of the concepts that have sparked considerable interest in the theory of production and efficiency is that of returns to scale (RTS). Economics researchers typically define RTS using the notion of elasticity. Considerable research activity on RTS has also been observed by management science researchers, who utilize the methodology of Data Envelopment Analysis (DEA) to gain insights on RTS. In this paper, we present a theoretical framework that integrates existing economics and management science literature on RTS, and provides a solid foundation for research work in this area. Our framework defines, discusses, and proposes an approach to measure input- and output-oriented elasticities, and one-sided RTS. We demonstrate how the work done in DEA is a special case of our framework, and discuss the conditions under which the resulting two left-hand, and the two right-hand elasticities can be equal. Future research directions are also discussed. Author Affiliation: (a) Department of Mathematics and Statistics, Texas Tech University, Box 41042, Lubbock, TX 79409-1042, USA (b) Department of Public and Business Administration, School of Economics and Management, University of Cyprus, P.O. Box 20537, Nicosia, CY 1678, Cyprus Article History: Received 5 November 2002; Accepted 14 May 2004 Article Note: (footnote) [star] The authors are grateful to Professors William W. Cooper and Robert M. Thrall for their constructive and insightful comments on an earlier version of this paper.