Non-parametric Frontier Estimation

Non-parametric frontier estimation is a method used to evaluate the maximum possible output or efficiency of a decision-making unit (like a company) without assuming a specific mathematical form for the relationship between inputs and outputs. Instead, it uses observed data to construct a "frontier" line or surface that represents the best practices in the industry. This helps identify how close a particular unit is to the top-performing edge, highlighting efficiency without relying on predefined models. It's flexible and data-driven, making it suitable for complex or unknown production processes.