Distinguishing Technical Inefficiency from Desirable and Undesirable Congestion with an Application to Regional Industries in China

• Main Authors: Jun Wang, Yong Zha
• Format: Article
• Language: English
• Published: MDPI AG 2014-12-01
• Series: Sustainability
• Subjects: data envelopment analysis; technical inefficiency; managerial inefficiency; desirable and undesirable congestion
• Online Access: http://www.mdpi.com/2071-1050/6/12/8808

Congestion is an important issue that requires the efficiency of decision-making units (DMUs). We first classify conventional congestion into congestion (newly defined) and technical inefficiency, based on prior research and real applications. Modified definitions and mathematical expression of congestion, managerial inefficiency, and technical inefficiency are proposed to better illustrate the differences between them. Several modified models are provided to identify and recognize those types of inefficiencies and congestion. We then extend the model by considering the desirable and undesirable types of congestion simultaneously. The proposed approach is applied and verified by identifying resource congestion and environmental inefficiencies in China’s economic development.