Efficiency Evaluation in Practice: a Comparison of Parametric and Non-parametric Approaches

Accepted - May 2024

Abstract

At present, it is possible to find a large number of studies evaluating the efficiency of units in various fields. Most authors typically choose only one model for evaluation. It is possible to use different models built on the basis of more or less varying approaches. However, different approaches (even the choice of specific model) may lead to divergent efficiency results. This article focuses on two efficiency evaluation methods: the parametric method of stochastic frontier analysis and the non-parametric method of data envelopment analysis. The results show that the choice of a particular model will greatly affect the efficiency results.