7.Summaryand Conclusions
We haveproposednew cost inefficiency decompositions(multiplicative and additiveforms)for themultiplicative Russell and theslack-based (in)efficiency measures whichgauge (in)efficiencies relative tothe efficient subset, rather than the isoquant.Then,focusing on the additive form, weillustratethe additive cost inefficiency decompositionin a DEA framework.As expected, the slack-based decomposition typically results ina greater share of cost inefficiency due to technical rather than allocative inefficiency,which is illustrated in our empirical example.
