Hypercongestion in production correspondences: an empirical exploration

Walter Briec, Kristiaan Kerstens and Ignace van de Woestyne ()
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Walter Briec: CRESEM - Centre de Recherche sur les Sociétés et Environnements en Méditerranées - UPVD - Université de Perpignan Via Domitia, LAMPS - LAboratoire de Modélisation Pluridisciplinaire et Simulations - UPVD - Université de Perpignan Via Domitia
Ignace van de Woestyne: Department of Economics - Hogeschool-Universiteit Brussel

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Abstract: This empirical contribution reviews the rather limited existing literature measuring congestion in production. It first compares current ways to measure congestion using nonparametric specifications of technologies. In particular, it focuses on the magnitude and incidence of the congestion detected in empirical studies using traditional radial efficiency measures. Thereafter, it shows the limitations of this radial measurement and how alternative measurement schemes may reveal higher amounts of congestion. Then, the new, more general methodology of measuring S-congestion is presented. In particular, we first present a numerical example to illustrate the way the S-disposable technologies allow to capture more extreme forms of congestion by setting empirically determined upper bounds to the wasting of inputs. Then, an empirical illustration is presented based on an existing sample of data. A final section concludes.

Keywords: nonconvex hull; convex hull; congestion; Nonparametric technology (search for similar items in EconPapers)
Date: 2017-12-29
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Published in Applied Economics, 2017, 50 (27), pp.2938 - 2956. ⟨10.1080/00036846.2017.1412080⟩

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Journal Article: Hypercongestion in production correspondences: an empirical exploration (2018)
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Persistent link: https://EconPapers.repec.org/RePEc:hal:journl:hal-01744571

DOI: 10.1080/00036846.2017.1412080

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