Evaluating returns to scale and congestion of DMUs in DEA

Congestion is a wasteful stage of the production process where outputs are reduced due to excessive amount of inputs. In this thesis investigates types of methods return to scale and congestion prevailing in the data envelopment analysis literature. Among than the three prevailing method congestion i.e. the Fare-family model, the Cooper- family model, and the Weimodel, for measuring the congestion effect. The Fare-family model is able to decompose technical efficiency into the product of pure technical efficiency and congestion effect, yet fails to detect congestion in some situations. The Cooper-family model successfully detects congestion in all situations, yet is unable to differentiate pure technicalefficiency with the congestion effect. The Wei–Tone model does not have the aforementioned deficiencies, yet is unable to identify the excessive amounts of each input.

Keywords:

Data envelopment analysis , Congestion , Return to scale. Efficiency