S TOCHASTIC F RONTIER A NALYSIS (SFA)
6. C ONCLUSION
Data Envelopment Analysis and Stochastic Frontier Analysis are two complementary methods for assessing efficiency, the former being non-parametric. The challenge of evaluating complex organizations whose multiple inputs are transformed into multiple outputs makes DEA more appropriate as a benchmarking technique. It is especially appropriate for airports whose unique attributes (i.e., runway configurations, passenger terminals, passengers‘ origin and destination) make it more complex to compare with others.
On the other hand, SFA provides analysts with more control over model specification and validity testing through hypothesis testing.
R
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