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.

• 저널Management Science · 42(3) · 473–474
• 토픽Efficiency Analysis Using DEA · Management Science and Operations Research
• DOI10.1287/mnsc.42.3.473
• 저자John McDonald