Social and Behavioral Sciences Commons^™

Efficiency Estimates And Rankings Employing Data Envelopment And Stochastic Frontier Analyses: Evaluating The Management Of U.S. Public Colleges, G. Thomas Sav

Economics Faculty Publications

This paper estimates and compares operating efficiencies of publicly owned associate degree granting colleges in the United States using data envelopment analysis (DEA) and stochastic frontier analysis (SFA). Comparisons are based on panel data for 698 colleges over four academic years, 2005-09. Included are both constant and variable returns to scale DEA estimates along with half and truncated normal inefficiency SFA estimates. The values 0.56 vs. 0.45 represent the largest mean DEA-SFA efficiency differential. DEA results indicate that 13% of colleges are fully (100%) efficient while SFA puts that percentage at only 1.7%. Comparisons of rankings based on efficiency performance …

Productivity Growth And Efficiency Changes In Publicly Managed U.S. Comprehensive Universities: Data Envelopment Analysis And Malmquist Decompositions, G. Thomas Sav

Economics Faculty Publications

This paper uses data envelopment analysis and Malmquist index decompositions in estimating productivity and efficiency changes of comprehensive degree granting, publicly owned U.S. universities. Panel data for 247 universities is employed for the academic years 2005-09. Results indicate that universities incurred productivity regress on the order of 4% per annum. The regress was due to declines in technological change that overpowered the efficiency gains achieved by universities. The latter derived from both university management and scale efficiency improvements. The dynamics of annual changes suggest that the financial crisis worsened productivity regress but created positive efficiency changes. It will, however, be …

Spillover Effects Of Crimes In Neighboring States Of Mexico, Mingming Pan, Benjamin Widner, Carl E. Enomoto

Economics Faculty Publications

The recent surge in crime and drug-related violence in Mexico has had a profound effect on the Mexican economy. Thousands of businesses have closed in Ciudad Juarez, a city that borders the U.S., due to the violence that has erupted between drug cartels. It has been estimated by Rios (2007) that $4.3 billion of losses occur yearly to Mexico, due to illegal drug activity in the country. Using a spatial model, this paper analyzes the determinants of crime in Mexican states. It was found that high levels of total crime and drug-related violence in neighboring states of Mexico have spillover …

Stochastic Cost Inefficiency Estimates And Rankings Of Public And Private Research And Doctoral Granting Universities, G. Thomas Sav

Economics Faculty Publications

Stochastic frontier cost and inefficiency estimates are provided for research and doctoral granting universities in the U.S. Separate sector estimates are produced for public and private non-profit universities. Panel data spanning four academic years, 2005-2009, is used to estimate underlying cost structures. Inefficiency is modeled as depending on institutionally specific environmental factors. Results indicate that public universities are on average more efficient than their private counterparts. The latter exhibit greater variability and when evaluated at the median inefficiencies there does not appear to be any statistically significant difference. Time varying inefficiency estimates point to public sector efficiency gains but private …

For-Profit College Entry And Cost Efficiency: Stochastic Frontier Estimates Vs Two-Year Public And Non-Profit Colleges, G. Thomas Sav

Economics Faculty Publications

This paper provides stochastic frontier cost and (in)efficiency estimates for private for-profit colleges with comparisons to public and private non-private colleges. The focus is on the two-year U.S. higher education sector where there exists the largest and fastest growing entry of for-profit colleges. Unbalanced panel data is employed for four academic years, 2005-2009. Translog cost frontiers are estimated with an inefficiency component that depends upon environmental factors defined by college specific characteristics. More experienced public and private non-profit colleges are found to be more cost efficient relative to the newer entrants. In addition, the newer for-profits exhibit greater efficiency variability …

Is The Production Of Religious Knowledge Efficient? Managing Faith Related Postsecondary Institutions, G. Thomas Sav

Economics Faculty Publications

The focus of this paper is on the efficiency of producing and managing religion based knowledge in postsecondary institutions. Panel data is used to estimate a stochastic cost frontier and associated inefficiencies for a panel of 222 U.S. bible colleges, theological seminaries, and other faith based higher education institutions over the 2005-09 academic years. Results indicate that institutions offering undergraduate only education are on average less inefficient than graduate only or combined undergraduate-graduate education institutions. Government provided student loans and private philanthropy are efficiency improving, while institutional debt acts to increase inefficiency. Time varying inefficiencies show efficiency gains over the …

Cost Inefficiencies And Rankings Of Ivy Universities: Stochastic Panel Estimates, G. Thomas Sav

Economics Faculty Publications

This paper employs stochastic frontier analysis in providing estimates of the operating cost inefficiencies of private non-profit and public ivy universities in the U.S. Panel data for academic years 2005-09 is used to estimate cost frontiers under two alternative specifications that lead to estimated gross and net inefficiencies. Time varying inefficiencies are reported for each academic year and used to calculate university inefficiency rankings by sector. The results suggest that private ivy universities are less inefficient or more efficient than their public counterparts. However, public ivies appear to have made significant inefficiency adjustments perhaps in response to the global financial …

Minority Serving College And University Cost Efficiencies, G. Thomas Sav

Economics Faculty Publications

Problem Statement:

Higher education minority enrollment growth has far outstripped white non-minority growth in the United States. Minority serving colleges and universities have disproportionately attended to that growth and will continue to play a critical role in providing minority educational opportunities in a knowledge based and globally diverse economy. However, they will face new and challenging budgetary and managerial reforms induced by the global financial crisis. As a result, they will be pressured to operate in the future with greater cost efficiency.

Approach:

Panel data pertaining to minority serving colleges and universities was used along with stochastic frontier analysis to …

Does Faculty Tenure Improve Student Graduation Rates?, G. Thomas Sav

Economics Faculty Publications

The primary objective of this paper is to determine whether tenure in comparison to non-tenure faculty employment is efficient in producing the academic success of university students. A stochastic production frontier is estimated for university graduation rates while the inefficiency specification includes measures of tenured, tenure-track, and non-tenure track faculty employment. Using panel data for U.S. doctoral and master level public universities, the evidence indicates that the employment status does matter and that increases in the pro- portion of tenured faculty employment lead to efficiency gains in graduation rates. Effects of tenure-track and non-tenure track faculty are somewhat mixed with …

Data Envelopment Analysis Of Productivity Changes In Higher Education For-Profit Enterprises Compared To Non-Profits, G. Thomas Sav

Economics Faculty Publications

Data envelopment analysis is used to compare private for-profit colleges to publicly owned colleges in terms of their operating efficiency and productivity. Academic year 2005-09 panel data is used for two-year institutions in the U.S. Results indicate that for-profit efficiency exceeded that of public colleges. Malmquist index results show that colleges in both sectors increased managerial and scale efficiencies, but that both were hindered by technological regress to the extent that overall productivity declined. 2007-08 created efficiency declines across the board, but for-profits managed large technological gains that produced the only annual productivity improvement for either sector. The results are …