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AN OVERVIEW ON PARAMETRIC AND NON-PARAMETRIC METHODS TO MEASURE PERFORMANCE
Abstract
The present paper is concerned with reviewing different types of tools and methodologies that are already implemented for statistical analysis of performance and efficiency within the economic field. For this purpose, our attention considers both parametric and non-parametric methods and tries to identify the most appropriate ones. This research is oriented on different levels, namely on identifying the difference between parametric and non-parametric methods, their purpose and applications. Regarding the test performed in statistics, it is necessary to consider the followings: i) whether measurements are matched or unmatched, ii) whether measurements are at the interval, ordinal or categorical level, iii) whether the decisions are about differences between the populations from which samples come, or whether decisions are about associations between features within the population from which samples come. Even the discussion on whether parametric or non-parametric methods are more appropriate to be considered has been going on for decades; our results reveal that indeed, all the statistical techniques have both advantages and disadvantages, and it is up to anyone to weigh them up in the context of their own research objectives. For public sector performance measurement, non-parametric methods seem to be the method that has the potential to impose axiomatic properties and production frontier efficiency estimation.
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