Note: A Problem with the Decomposition of Technical Inefficiency into Scale and Congestion Components
Management Science · 1996 · Volume 42 · Issue 3
Abstract
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.
Keywords
efficiency, productivity, mathematical programming, data envelopment analysis
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