Measuring productive efficiency for nonprofit organizations has posed a great challenge to applied researchers today. The problem has many facets and diverse implications for a number of disciplines such as economics, applied statistics, management science and information theory. This monograph discusses four major areas, which emphasize the applied economic and econometric as. pects of the production frontier analysis: A. Stochastic frontier theory, B. Data envelopment analysis, C. Clustering and estimation theory, D. Economic and managerial applications Besides containing an up-to-date survey of the mos. t recent developments in the field, the monograph presents several new results and theorems from my own research. These include but are not limited to the following: (1) interface with parametric theory, (2) minimax and robust concepts of production frontier, (3) game-theoretic extension of the Farrell and Johansen models, (4) optimal clustering techniques for data envelopment analysis and (5) the dynamic and stochastic generalizations of the efficiency frontier at the micro and macro levels. In my research work in this field I have received great support and inspiration from Professor Abraham Charnes of the University of Texas at Austin, who has basically founded the technique of data envelopment analysis, developed it and is still expanding it. My interactions with him have been most fruitful and productive. I am deeply grateful to him. Finally, I must record my deep appreciation to my wife and two children for their loving and enduring support. But for their support this work would not have been completed.

1 Efficiency Analysis in Production.- 1.1 Partial and General Equilibrium Models.- 1.2 Production Frontier as Flexible Production Functions.- 1.3 Parametric Forms and their Econometric Estimation.- 1.4 Nonparametric Theory: Different Facets.- 1.5 Implications of Nonparametric Theory.- 2 The Nonparametric Approach.- 2.1 Convex Hull Method.- 2.2 Stochastic Micro and Macro Frontier.- 2.3 Data Envelopment Analysis.- 2.4 Consistency Approach through Data Adjustment.- 2.5 Distribution of Technical and Price Efficiency.- 3 Interface With Parametric Theory.- 3.1 Average versus Optimal Production Function.- 3.2 Estimation of Production Frontier.- 3.3 Robust Methods of Estimation.- 3.4 Data Screening and Cluster Analysis.- 3.5 Problems in Parametric Theory.- 4 Implications of Nonparametric Theory.- 4.1 Economic Implications.- 4.2 Econometrics and Minimax Frontiers.- 4.3 The Regression and Index Number Problem.- 4.4 Joint Costs and Nonlinear Frontiers.- 4.5 Efficiency Analysis in the Stochastic Case.- 5 Extensions of Nonparametric Approach.- 5.1 Economic Generalizations.- 5.2 Extensions of Data Envelopment Analysis.- 5.3 Combining Parametric and Nonparametric Models.- 5.4 Nonparametric Regression and Bootstrap Methods.- 5.5 Distribution of Technical and Price Efficiency.- 6 Applications of Nonparametric Theory.- 6.1 Production in Quasi-Market and Non-Market Systems.- 6.2 Managerial Models in Operations Research.- 6.3 Economic Development and International Trade.- 6.4 Stochastic Programming and Markov Process Models.- 6.5 Multivariate Data Analysis and Information Theory.- Author Index.