Using stochastic frontier and data envelopment analysis to measure port efficiency: application issues and implications

Both the stochastic frontier analysis (SFA) and data envelopment analysis (DEA) methods have been applied extensively in port efficiency measurement. However, the two methods are based on completely different approaches; one is parametric while the other is non-parametric. This difference makes their comparison technically un-meaningful. To overcome this issue, the current study applies the bootstrapped DEA method instead of the traditional, non-parametric one. The data set for the 43 largest sea ports in Vietnam was used. The analysis results indicate that, while the efficiency indexes obtained from the two methods provide useful and consistent measures of the Vietnamese ports’ efficiency, they remain significantly different. Based on this, further analysis is conducted to gain further insights into issues concerning the practical application of the two methods.