Degree of Scale Economies and Congestion: A Unified DEA Approach

European Journal of Operational Research, Vol. 158, No. 3, Pages: 755-772, 2004

Posted: 18 Nov 2012

See all articles by Kaoru Tone

Kaoru Tone

National Graduate Institute for Policy Studies (GRIPS)

Biresh Sahoo

Xavier Institute of Management

Date Written: 2004

Abstract

There are increasing concerns about how increase in congestion can adversely affect output as well as about the relative benefit-cost ratio or return on investment associated with alternative projects or policies to address those problems. Regardless of what policy strategies are used to address congestion, the fact remains that we cannot assess the economic benefits of congestion-reduction strategies unless we are able to measure the extent to which congestion affects productivity in general, and scale economies in particular. This paper makes a novel attempt to suggest a method in a non-parametric framework to measure scale elasticity in production in the presence of congestion.

Keywords: DEA, scale elasticity, degree of scale economies, congestion

JEL Classification: D24, C61

Suggested Citation

Tone, Kaoru and Sahoo, Biresh K., Degree of Scale Economies and Congestion: A Unified DEA Approach (2004). European Journal of Operational Research, Vol. 158, No. 3, Pages: 755-772, 2004, Available at SSRN: https://ssrn.com/abstract=2177213

Kaoru Tone

National Graduate Institute for Policy Studies (GRIPS) ( email )

7-22-1 Roppongi, Minato-Ku
Tokyo 106-8677, Tokyo 106-8677
Japan

Biresh K. Sahoo (Contact Author)

Xavier Institute of Management ( email )

Xavier Square
Bhubaneswar, 751 013
India
+91 674 6647 735 (Phone)

HOME PAGE: http://hib.xub.edu.in/Hibiscus/Pub/faccvDet.php?client=xu&facid=XF325

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