Implications of variant efficiency measures for policy evaluations in UK higher education

Policy goals in UK higher education encourage the publicly funded universities to become more-specialised and larger in size without compromising output quality. Efficiency gains are expected to flow from this increased specialisation in accordance with universities’ comparative research and teachin...

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Published inSocio-economic planning sciences Vol. 40; no. 2; pp. 119 - 142
Main Authors Colin Glass, J., McCallion, Gillian, McKillop, Donal G., Rasaratnam, Syamarlah, Stringer, Karl S.
Format Journal Article
LanguageEnglish
Published Elsevier Ltd 01.06.2006
Elsevier
SeriesSocio-Economic Planning Sciences
Subjects
Cost-effectiveness
Data analysis
DEA
Economies of scale
Education policy
Higher education
Principal-agent theory
Principal–agent analysis
Scale efficiency
Technical efficiency
Universities
University performance
DEA
University performance
Scale efficiency
Technical efficiency
Principal–agent analysis
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Summary:Policy goals in UK higher education encourage the publicly funded universities to become more-specialised and larger in size without compromising output quality. Efficiency gains are expected to flow from this increased specialisation in accordance with universities’ comparative research and teaching strengths. Mergers to reap further gains from economies of scale are also being actively encouraged. Given this scenario, the paper investigates whether best-practice efficiency measurement based on data envelopment analysis (DEA) provides empirical support for the current policy goals. It also assesses whether such support is dependent on the specific type of efficiency measure used in the DEA modelling. This assessment finds that a selection of (nine) commonly used, variant efficiency measures generally support the current policy goals. The paper also uses the principal–agent framework to explore the issues involved in using computed DEA-based efficiency scores for policy evaluations and possible funding guidance in UK higher education. This highlights empirically how policy-makers and universities can have very different preferences about which efficiency measure is to be used for policy evaluations and possible funding guidance.
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ISSN:0038-0121
1873-6041
DOI:10.1016/j.seps.2004.10.004