I employ a wide range of parametric and non-parametric cost frontiers efficiency estimation methods to estimate economic efficiency and economics of scale, using panel data of 25 Taiwanese life insurance companies over the period 1980-2002. According to my empirical implementation, the two methodologies yield similar average efficiency estimates, yet they come to different results pertaining to efficiency rankings, the stability of measured efficiency over time, the conspiracy between frontier efficiency and conventional performance measures, and the estimates of scale economies. Thus, the choice of an estimation approach can result in different conclusions and policy implications regarding cost efficiencies and cost economies. These findings suggest that making policy decisions and evaluations relies on multiple techniques and specifications.
