Productive and Allocative Inefficiencies in U.K. Building Societies: A Comparison of Non-parametric and Stochastic Frontier Techniques.

A nonparametric frontier approach is utilized to calculate the efficiency of U.K. building societies. This paper extends previous work in the area in two main ways. First, the analysis focuses upon allocative and technical efficiency rather than simply decomposing the latter into its constituent components, pure technical and pure scale efficiency, as a number of previous papers have done. Secondly, the results on overall efficiency obtained using the nonparametric frontier approach are contrasted with the results obtained using a stochastic frontier cost function approach. Copyright 1996 by Blackwell Publishers Ltd and The Victoria University of Manchester