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Economic Efficiency and Frontier Techniques
Author(s) -
MurilloZamorano Luis R.
Publication year - 2004
Publication title -
journal of economic surveys
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 1.657
H-Index - 92
eISSN - 1467-6419
pISSN - 0950-0804
DOI - 10.1111/j.1467-6419.2004.00215.x
Subject(s) - frontier , bootstrapping (finance) , parametric statistics , economics , econometrics , bayesian probability , stochastic frontier analysis , set (abstract data type) , duality (order theory) , computer science , mathematical economics , mathematics , macroeconomics , production (economics) , statistics , archaeology , discrete mathematics , artificial intelligence , history , programming language
. Most of the literature related to the measurement of economic efficiency has based its analysis either on parametric or on non‐parametric frontier methods. The choice of estimation method has been an issue of debate, with some researchers preferring the parametric and others the non‐parametric approach. The aim of this paper is to provide a critical and detailed review of both core frontier methods. In our opinion, no approach is strictly preferable to any other. Moreover, a careful consideration of their main advantages and disadvantages, of the data set utilized, and of the intrinsic characteristics of the framework under analysis will help us in the correct implementation of these techniques. Recent developments in frontier techniques and economic efficiency measurement such as Bayesian techniques, bootstrapping, duality theory and the analysis of sampling asymptotic properties are also considered in this paper.