Estimating Economic Efficiencies of Public Sector Organisations with Stochastic Frontier Analysis: Evidence from Turkish Higher Education

Erkoc, Taptuk Emre (2013): Estimating Economic Efficiencies of Public Sector Organisations with Stochastic Frontier Analysis: Evidence from Turkish Higher Education.

Abstract

This paper investigates 53 public HEIs in Turkey between 2005 and 2010 including 5 full academic terms to estimate both their cost frontier and inefficiencies. The initial findings of six different models imply that Turkish universities perform quite well concerning their overall efficiency values albeit with variations among them. Besides, within this five-year time span, Turkish universities have not shown any improvement in their efficiencies based on Battese and Coelli's (1992) time variant model. In addition to that, the determinants of inefficiencies in Turkish HEIs are dependent upon certain variables. The size of HEIs is seen to be the most influential factor behind inefficiencies referring to the fact that small size universities are expected to experience relatively higher efficiency results. Subsequently, the impact of load factor is as important as the size effect. The negative coefficient implies that, universities with higher load factor demonstrate better efficiency performances. Moreover, age of the university, the percentage of foreign students, percentage of full-time faculty and having medical school are the other variables reducing efficiency in HEIs based on the only one model. Percentage of professors does not have any influence on the inefficiencies according to the both two models.

• Item Type: MPRA Paper
• Language: English
• Keywords: Panel Data Models, Stochastic Frontier Analysis, Cost efficiency, Universities
• Subjects: C - Mathematical and Quantitative Methods > C2 - Single Equation Models ; Single Variables > C23 - Panel Data Models ; Spatio-temporal Models; C - Mathematical and Quantitative Methods > C2 - Single Equation Models ; Single Variables > C24 - Truncated and Censored Models ; Switching Regression Models ; Threshold Regression Models; D - Microeconomics > D2 - Production and Organizations > D24 - Production ; Cost ; Capital ; Capital, Total Factor, and Multifactor Productivity ; Capacity; I - Health, Education, and Welfare > I2 - Education and Research Institutions > I23 - Higher Education ; Research Institutions

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