Journal of Productivity Analysis

, Volume 21, Issue 2, pp 133–152

Measuring Cost Efficiency in European Banking: A Comparison of Frontier Techniques

  • Laurent Weill

DOI: 10.1023/B:PROD.0000016869.09423.0c

Cite this article as:
Weill, L. Journal of Productivity Analysis (2004) 21: 133. doi:10.1023/B:PROD.0000016869.09423.0c


This paper investigates the consistency of efficiency frontier methods on European banking samples. We measure the cost efficiency of banks from five European countries (France, Germany, Italy, Spain, Switzerland) with three approaches: stochastic frontier approach, distribution-free approach, and data envelopment analysis. We compare means, correlation coefficients, two public policy issues, and the correlation with standard measures of performance. In general, we conclude in favor of the lack of robustness between approaches, even if there are some similarities in particular between parametric approaches. We do, however, observe some correlation between all frontier approaches and standard measures of performance.

banking efficiency stochastic frontier approach distribution-free approach data envelopment analysis 

Copyright information

© Kluwer Academic Publishers 2004

Authors and Affiliations

  • Laurent Weill
    • 1
  1. 1.Institut d'Etudes PolitiquesLarge, Université Robert SchumanStrasbourg CedexFrance

Personalised recommendations