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