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Measuring the Efficiency and Productivity of British Universities: An Application of DEA and the Malmquist Approach

  • AT Flegg

    ()

    (Leeds Metropolitan University)

  • DO Allen

    (University of the West of England)

  • K Field

    (University of the West of England)

  • TW Thurlow

    (University of the West of England)

Registered author(s):

    This paper uses data envelopment analysis to examine the technical efficiency (TE) of 45 British universities in the period 1980/81 to 1992/93. This period was chosen primarily because it was characterized by major changes in public funding and in student : staff ratios. To shed light on the causes of variations in efficiency, TE is decomposed into pure technical efficiency (PTE), congestion efficiency (CE) and scale efficiency (SE). The analysis indicates that there was a substantial rise in the weighted geometric mean TE score during the study period, although this rise was most noticeable between 1987/88 and 1990/91. The rising TE scores are attributed largely to the gains in PTE and CE, with SE playing a minor role. The Malmquist approach is then used to distinguish between changes in technical efficiency and intertemporal shifts in the efficiency frontier. The results reveal that total factor productivity rose by 51.5% between 1980/81 and 1992/93, and that most of this increase was due to a substantial outward shift in the efficiency frontier during this period.

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    File URL: http://carecon.org.uk/DPs/0304.pdf
    File Function: First version, 2003
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    Paper provided by Department of Accounting, Economics and Finance, Bristol Business School, University of the West of England, Bristol in its series Working Papers with number 0304.

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    Length: 47 pages
    Date of creation: Apr 2003
    Date of revision:
    Handle: RePEc:uwe:wpaper:0304
    Contact details of provider: Postal: 0117 328 3610
    Phone: 0117 328 3610
    Web page: http://www1.uwe.ac.uk/bl/research/bristoleconomics.aspx

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    1. Fare, Rolf & Grosskopf, Shawna, 1994. "Estimation of returns to scale using data envelopment analysis: A comment," European Journal of Operational Research, Elsevier, vol. 79(2), pages 379-382, December.
    2. Banker, Rajiv D. & Chang, Hsihui & Cooper, William W., 1996. "Equivalence and implementation of alternative methods for determining returns to scale in data envelopment analysis," European Journal of Operational Research, Elsevier, vol. 89(3), pages 473-481, March.
    3. Johnes, Geraint & Johnes, Jill, 1993. "Measuring the Research Performance of UK Economics Departments: An Application of Data Envelopment Analysis," Oxford Economic Papers, Oxford University Press, vol. 45(2), pages 332-47, April.
    4. Jondrow, James & Knox Lovell, C. A. & Materov, Ivan S. & Schmidt, Peter, 1982. "On the estimation of technical inefficiency in the stochastic frontier production function model," Journal of Econometrics, Elsevier, vol. 19(2-3), pages 233-238, August.
    5. Boussofiane, A. & Dyson, R. G. & Thanassoulis, E., 1991. "Applied data envelopment analysis," European Journal of Operational Research, Elsevier, vol. 52(1), pages 1-15, May.
    6. Cherchye, Laurens & Kuosmanen, Timo & Post, Thierry, 2001. "Alternative treatments of congestion in DEA: A rejoinder to Cooper, Gu, and Li," European Journal of Operational Research, Elsevier, vol. 132(1), pages 75-80, July.
    7. Johnes, Geraint, 1997. "Costs and Industrial Structure in Contemporary British Higher Education," Economic Journal, Royal Economic Society, vol. 107(442), pages 727-37, May.
    8. Banker, Rajiv D., 1984. "Estimating most productive scale size using data envelopment analysis," European Journal of Operational Research, Elsevier, vol. 17(1), pages 35-44, July.
    9. Fare, Rolf & Grosskopf, Shawna, 2000. "Slacks and congestion: a comment," Socio-Economic Planning Sciences, Elsevier, vol. 34(1), pages 27-33, March.
    10. Cooper, W. W. & Gu, Bisheng & Li, Shanling, 2001. "Comparisons and evaluations of alternative approaches to the treatment of congestion in DEA," European Journal of Operational Research, Elsevier, vol. 132(1), pages 62-74, July.
    11. Cooper, William W. & Seiford, Lawrence M. & Zhu, Joe, 2000. "A unified additive model approach for evaluating inefficiency and congestion with associated measures in DEA," Socio-Economic Planning Sciences, Elsevier, vol. 34(1), pages 1-25, March.
    12. Beasley, J. E., 1990. "Comparing university departments," Omega, Elsevier, vol. 18(2), pages 171-183.
    13. Seiford, Lawrence M. & Zhu, Joe, 1999. "An investigation of returns to scale in data envelopment analysis," Omega, Elsevier, vol. 27(1), pages 1-11, February.
    14. Izadi, Hooshang & Johnes, Geraint & Oskrochi, Reza & Crouchley, Robert, 2002. "Stochastic frontier estimation of a CES cost function: the case of higher education in Britain," Economics of Education Review, Elsevier, vol. 21(1), pages 63-71, February.
    15. Banker, Rajiv D. & Thrall, R. M., 1992. "Estimation of returns to scale using data envelopment analysis," European Journal of Operational Research, Elsevier, vol. 62(1), pages 74-84, October.
    16. R. D. Banker & A. Charnes & W. W. Cooper, 1984. "Some Models for Estimating Technical and Scale Inefficiencies in Data Envelopment Analysis," Management Science, INFORMS, vol. 30(9), pages 1078-1092, September.
    17. P. Byrnes & R. Färe & S. Grosskopf, 1984. "Measuring Productive Efficiency: An Application to Illinois Strip Mines," Management Science, INFORMS, vol. 30(6), pages 671-681, June.
    18. Geraint Johnes, 1995. "Scale and technical efficiency in the production of economic research," Applied Economics Letters, Taylor & Francis Journals, vol. 2(1), pages 7-11.
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