Radial and nonradial static efficiency decompositions: a focus on congestion measurement

We summarize and extend the existing frontier literature by outlining proper ways of decomposing efficiency using both radial and nonradial efficiency measures when using nonparametric, deterministic frontier models. Our contribution relates to a recent paper of Viton (Transportation Research-B 31, 23-39, 1997) analysing the efficiency of U.S. multi-mode bus transit systems. In particular, the author evaluates the technical efficiency, congestion and scale properties of these companies. Due to a methodological mistake he could not detect congestion in his sample. Our proposals remedy this problem and focus on the underexplored issue of proper congestion measurement in general and in transport in particular.