Note: A Problem with the Decomposition of Technical Inefficiency into Scale and Congestion Components

In 1988, Byrnes, Färe, Grosskopf and Lovell define a decomposition of inefficiency differentials into scale and congestion components. This note shows that the decomposition may be sensitive to the order in which the two components are calculated, and, consequently, use of the decomposition may result in misleading signals being given to management.

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Year of publication:	1996
Authors:	McDonald, John
Published in:	Management Science. - Institute for Operations Research and the Management Sciences - INFORMS, ISSN 0025-1909. - Vol. 42.1996, 3, p. 473-474
Publisher:	Institute for Operations Research and the Management Sciences - INFORMS
Subject:	efficiency \| productivity \| mathematical programming \| data envelopment analysis

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Extent:	application/pdf
Type of publication:	Article
Other identifiers:	10.1287/mnsc.42.3.473 [DOI]
Source:	RePEc - Research Papers in Economics

Persistent link: https://www.econbiz.de/10009198218