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University Efficiency: A Comparison and Consolidation of Results from Stochastic and Non-stochastic Methods

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  • Melville McMillan
  • Wing Chan

Abstract

Efficiency scores are determined for Canadian universities using both data envelopment analysis and stochastic frontier methods for selected specifications. The outcomes are compared. There is considerable divergence in the efficiency scores and their rankings among methods and specifications. An analysis of rankings, however, reveals that the relative positions of individual universities across sets of several efficiency rankings (e.g., all the data envelopment analysis and stochastic frontier outcomes) demonstrate an underlying consistency. High-efficiency and low-efficiency groups are evidenced but the rank for most universities is not significantly different from that of many others. The results emphasize the need for caution when employing efficiency scores for management and policy purposes, and they recommend looking for confirmation across viable alternatives.

Suggested Citation

  • Melville McMillan & Wing Chan, 2006. "University Efficiency: A Comparison and Consolidation of Results from Stochastic and Non-stochastic Methods," Education Economics, Taylor & Francis Journals, vol. 14(1), pages 1-30.
  • Handle: RePEc:taf:edecon:v:14:y:2006:i:1:p:1-30
    DOI: 10.1080/09645290500481857
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    References listed on IDEAS

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    1. Fried, Harold O. & Lovell, C. A. Knox & Schmidt, Shelton S. (ed.), 1993. "The Measurement of Productive Efficiency: Techniques and Applications," OUP Catalogue, Oxford University Press, number 9780195072181.
    2. Philip Stevens, 2004. "Accounting for Background Variables in Stochastic Frontier Analysis," National Institute of Economic and Social Research (NIESR) Discussion Papers 239, National Institute of Economic and Social Research.
    3. Philip Stevens, 2001. "The determinants of economic efficiency in English and Welsh universities," National Institute of Economic and Social Research (NIESR) Discussion Papers 185, National Institute of Economic and Social Research.
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    Keywords

    Universities; efficiency; DEA; stochastic frontier;

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