We discuss the nonparametric approach to profit efficiency analysis at the firm and industry levels in the absence of complete price information, and propose two new insights. First, choosing one commodity (whose price is known) as a numeraire good enables us to measure profit inefficiency in...

The literature of productive efficiency analysis is divided into two main branches: the parametric Stochastic Frontier Analysis (SFA) and nonparametric Data Envelopment Analysis (DEA). This paper attempts to combine the virtues of both approaches in a unified framework. We follow the SFA...