Hotelling competition and teaching efficiency of Italian university faculties. A semi-parametric analysis.

Bergantino, Angela Stefania and Capozza, Claudia and Porcelli, Francesco (2015): Hotelling competition and teaching efficiency of Italian university faculties. A semi-parametric analysis.

Abstract

In this paper we explore the effect of competition (à la Hotelling) on teaching efficiency of the Italian university system at faculty-level, over the period 2004 to 2008. The analysis is performed in two stages. First, we use Data Envelopment Analysis (DEA) to calculate an index of teaching efficiency. Second, a parametric approach is used to evaluate the determinants of teaching efficiency, focusing on the impact of competition. Our results are in favour of competition: when faculties operate in a more competitive environment, they are induced to carry out teaching activity in a more efficient way.

• Item Type: MPRA Paper
• Language: English
• Keywords: teaching efficiency, competition, two step DEA analysis
• Subjects: A - General Economics and Teaching > A2 - Economic Education and Teaching of Economics; L - Industrial Organization > L1 - Market Structure, Firm Strategy, and Market Performance > L13 - Oligopoly and Other Imperfect Markets

References

1.Abbott, M., Doucouliagos, C. (2003). The efficiency of Australian universities: a data envelopment analysis. Economics of Education Review, 22(1): 89-97.

2.Abbott, M., Doucouliagos, C. (2009). Competition and efficiency: overseas students and technical efficiency in Australian and New Zealand universities. Education Economics, 17(1): 31--57.

3.Adam, A., Delis, D. M., Kammas, P. (2008). Fiscal Decentralization and Public Sector Efficiency: Evidence from OECD Countries. CESifo Working Paper Series 2364, CESifo Group Munich.

4.Afonso, A., St. Aubyn, M. (2006). Relative Efficiency of Health Provision: a DEA Approach with Non-discretionary Inputs. Working Papers 2006/33, Department of Economics at the School of Economics and Management (ISEG), Technical University of Lisbon.

5.Agasisti, T., Dal Bianco, A. (2006). Data envelopment analysis to the Italian university system: Theoretical issues and policy implications. International Journal of Business Performance Management, 8(4): 344--67.

6.Agasisti, T. (2009). Market forces and competition in university systems: theoretical reflections and empirical evidence from Italy. International Review of Applied Economics, 23(4): 463--483.

7.Agasisti, T., Johnes, G. (2009). Beyond Frontiers: Comparing the Efficiency of Higher Education Decision-Making Units Across More than One Country. Education Economics, 17(1): 59-79.

8.Agasisti, T., Perez-Esparrels, C. (2010). Comparing Efficiency in a Cross-Country Perspective: The case of Italian and Spanish State Universities. Higher Education, 59(1): 85-103.

9.Agasisti, T., Pohl, C. (2012). Comparing German and Italian Public Universities: Convergence or Divergence in the Higher Education Landscape? Managerial and Decision Economics, 33(3): 71-85.

10.Athanassopoulos, A., Shale, E. (1997). Assessing the Comparative Efficiency of Higher Education Institutions in the UK by the Means of Data Envelopment Analysis. Education Economics, 5(2): 117-134.

11.Avkiran, N. K. (2001). Investigating technical and scale efficiencies of Australian universities through data envelopment analysis. Socio-Economic Planning Sciences, 35(1): 57-80.

12.Banker, R.D., Charnes, A., Cooper, W.W. (1984). Some Models for Estimating Technical and scale inefficiencies in DEA. Management Science, 32(9): 1613-1627.

13.Beasley, J.E. (1995). Determining teaching and research efficiencies. Journal of the Operational Research Society, 46(4): 441--452.

14.Bergantino, A. S., Musso, E. (2011). The role of external factors versus managerial ability in determining seaports' relative efficiency. An input-by-input analysis through a multi-step approach on a panel of Southern European ports. Maritime Economics & Logistics, 13(2): 121-141.

15.Bergantino, A. S., Porcelli, F. (2011). A measure of Italian local government spending efficiency: The case of transport related expenditure. A preliminary analysis. Sostenibilità, qualità e sicurezza nei sistemi di trasporto e logistica. Milano, Franco Angeli, pp. 24-35.

16.Bergantino, A. S., Porcelli, F. (2012). Is efficiency in urban transport related expenditures capitalised in housing market quotations? The case of Italian municipalities. Mimeo, Department of Economics and Mathematics, University of Bari.

17.Bonaccorsi, A., Daraio, C., Simar, L. (2007). Efficiency and productivity in European Universities. Exploring trade-offs in the strategic profile. Universities and Strategic Knowledge Creation. Specialization and Performance in Europe. Edward Elgar Publisher.

18.Charnes, A., Cooper, W. W., and Rhodes, E. (1978). Measuring the efficiency of decision-making units. European Journal of Operational Research, 2(6): 429--444.

19.Celik, O. Ecer, A. (2009). Efficiency in accounting education: evidence from Turkish Universities. Critical Perspectives on Accounting, 20(5): 614-634.

20.Cokgezen, M. (2009). Technical efficiencies of faculties of economics in Turkey. Education Economics, 17(1): 81-94.

21.Debreu, G. (1951). The coefficient of resource utilization. Econometrica, 19(3): 273-292.

22.Johnes, G., Johnes, J. (1993). Measuring the research performance of UK economics departments: An application of data envelopment analysis. Oxford Economic Papers, 45(2): 332--347.

23.Johnes, J., Johnes, G. (1995). Research funding and performance in U.K. university departments of economics: A frontier analysis. Economics of Education Review, 14(3): 301--314.

24.Johnes, J. (2006a). Data envelopment analysis and its application to the measurement of efficiency in higher education. Economics of Education Review, 25(3): 273-288.

25.Johnes, J. (2006b). Measuring teaching efficiency in higher education: An application of data envelopment analysis to economics graduates from UK Universities 1993. European Journal of Operational Research, 174(1): 443-456.

26.Joumady, O., Ris, C. (2005). Performance in European higher education: A non-parametric production frontier approach. Education Economics, 13(2): 189-205.

27.Kempkes, G., Pohl, C. (2010) The Efficiency of German Universities -- Some Evidence from Non-Parametric and Parametric Methods. Applied Economics, 42(16): 2063-2079.

28.Kneip, A., Park, B. U., and Simar, L. (1998). A note on the convergence of nonparametric DEA estimators for production efficiency scores. Econometric Theory, 14:783–793.

29.Farrell, M. J. (1957). The measurement of productive efficiency. Journal of the Royal Statistical Society, 120(3): 253--281.

30.Flegg, A.T., Allen, D.O., Field K., Thurlow T.W. (2004). Measuring the efficiency of British universities: a multi-period data envelopment analysis. Education Economics, 12(3): 231-49.

31.McCarty, T. A., Yaisawarng, S. (1993). Technical Efficiency in New Jersy School Districts. In: Fried, A. O., Lovell, A. K., Schmidt, S. S. editors, The Measurement of Productive Efficiency, chapter 10, Oxford University Press, 271-287.

32.Monaco, L. (2012). Measuring Italian university efficiency: a non-parametric approach. MPRA Paper No. 37949.

33.Papke, L. E. and Wooldridge, J. M. (2008). Panel data methods for fractional respose variables with an application to test pass rates. Journal of Econometrics, 145:121–133.

34.Pesenti, R., Ukovich W. (1996a). Data envelopment analysis: a possible way to evaluate the academic activities. Internal Report, DEEI, Università di Trieste.

35.Pesenti, R., and W. Ukovich. (1996b). Evaluating academic activities using DEA. Internal Report, DEEI, Università di Trieste.

36.Rizzi, D. (1999). L'efficienza dei Dipartimenti dell'Università Cà Foscari di Venezia Via DEA e DFA. Working Paper, Università Cà Foscari di Venezia.

37.Simar L., Wilson P. W. (1998). Sensitivity analysis of efficiency scores: How to bootstrap in nonparametric frontier models. Management Science, 44 (1): 49-61.

38.Simar, L. and Wilson P. W. (2000). A general methodology for bootstrapping in non-parametric frontier. Journal of Applied Econometrics, 27 (6): 779-802.

39.Timmer, C. P. (1971). Using a probabilistic frontier production function to measure technical efficiency. Journal of Political Economy, 79 (4): 776-794.

40.Tzeremes, N., Halkos, G. (2010). A DEA approach for measuring university departments' efficiency. MPRA Paper 24029, University Library of Munich, Germany.

41.Worthington, A. (2001). An Empirical Survey of Frontier Efficiency Measurement Techniques in Education. Education Economics, 9(3): 245-268.

42.Worthington, A. C., Dollery, B. (2002). Incorporating contextual information in public sector efficiency analaysis: comparative study of NSW local government. Applied Eonomics 34 (4): 453-464.