Critical comparison of the main methods for the technical efficiency

The Technical Efficiency is a basic tool to determine the factors that slow down the production. TE aims at evaluating and comparing the operating performance of a set of production units, such as Companies, Offices, Hospi- tals, Banks, Schools, Transport Systems, etc. This paper, after an overview of the literature regarding the methodologies for measuring the Technical Ef- ficiency, compares critically the two main approaches, the Data Envelopment Analysis (DEA) and the Stochastic Frontier Analysis (SFA). These method- ologies are also discussed within an original application that targets to study the efficiency of European Countries with respect to the Gross Domestic Product (GDP).