Distinguishing Technical and Scale Efficiency on Non-Convex and Convex Technologies: Theoretical Analysis and Empirical Illustrations.

This paper defines a decomposition of technical efficiency for a series of nonparametric deterministic reference technologies related to the Free Disposal Hull. More specificaally, introducing several returns to scale assumptions into this non-convex production model allows one to distinguish between technical and scale inefficiencies. These technologies and the resulting efficiency decomposition are illustrated with several data sets and contrasted with results based on the traditional, convex Data Envelopment Analysis models. In particular, data on UK rates departments are extensively analysed. Furthermore, samples of French urban transit companies and of Belgian municipalities serve to verify certain empirical regularities.