Decomposing technical efficiency with care

Decomposing technical efficiency with care

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Article ID: iaor2001108
Country: United States
Volume: 46
Issue: 1
Start Page Number: 167
End Page Number: 168
Publication Date: Jan 2000
Journal: Management Science
Authors: ,
Abstract:

In a recent note, John McDonald gave an example that shows that if technical efficiency à la Farrell is decomposed into a scale and a congestion component, the order in which the decomposition is done is critical for the outcome of the measures. This is an important observation that we should have addressed earlier.

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