Radial and Nonradial Technical Efficiency Measures on DEA Reference Technology : A Comparison Using US Banking Data

Technical efficiency measure can be classified as either radial or nonradial. While the theoretical question of which is the better type of measure is unresolved, the radial measures enjoy much greater popularity than the nonradial measures in the empirical literature. To assess the impact of choice of measure, this paper offers an empirical comparison of one radial and three nonradial measures of technical efficiency, relative to a variable returns to scale DEA model with strong disposability. The distributions and ranking of these efficiency scores are examined for a sample of US banks.