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

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.

Keywords: Universities, efficiency, DEA, stochastic frontier