Measurement of Congestion in the Simultaneous Presence of Desirable and Undesirable Outputs

The concept of congestion, which is mainly applied ineconomics, refers to a situation where inputs are overinvested. Manystudies have focused on congestion measurement by means of dataenvelopment analysis (DEA). However, most of the previousinvestigations only considered the framework of desirable outputs. In fact, firms in the real world unavoidably generate undesirableoutputs (such as pollutants or wastes) along with desirable outputs. Therefore, a new scheme is required for measuring congestion in thesimultaneous presence of both desirable and undesirable outputs. This paper develops a nonradial efficiency measure for includingundesirable outputs into the environmental performance. Based on theproposed model, a new definition and a new approach are presented todeal with congestion in the simultaneous presence of desirable andundesirable outputs. Then, this paper uses the presented method tostudy the pollutants (waste gas emission and waste discharge) of 31administrative regions of China. The finding indicates that 7industries pay attention to the reduction of their pollutantsaccompanying improvement of their commercial targets. Consequently,they do not show congestion in any input