There are several ways to measure the efficiency of banks. Traditionally
one can use return on assets (ROA), return on equity (ROE) or cost to income
ratio, among others. In recent years, Data Envelopment Analysis (DEA) has been
used by many economists, experts, and researchers to analyze the relative
efficiency of banks, hospitals, universities, and manufacturing firms. As the
efficiency of a bank can change every year, however, it is also important to
analyze the Total Factor Productivity (TFP) changes of Thai banks over time.
Hence, in this paper, we will apply DEA and Malmquist index technique to
evaluate the efficiency of Thai banking industry and its changes through the 2007-
2010 period.