Data envelopment analysis as a performance measure for tertiary education institutions

Noel Yahanpath
Hong Tong Wang

Abstract: This paper examines the development and application of Data Envelopment Analysis (DEA), a linear programming-based technique that focuses on productive efficiency, as an alternative method to measure, evaluate and benchmark the performance of Tertiary Education Institutions (TEIs). The performance of TEIs in different regions of New Zealand are evaluated with analysis of the relative efficiencies of the University and Polytechnic sectors separately and in combination through the application of the DEA technique. The capabilities of DEA are explored using a two-dimensional approach at three different levels - single input and single output measures; one input and two output measures; two input and two output measures. The relative efficiencies of New Zealand Universities and Polytechnics are evaluated separately, and two distinct efficiency frontiers were immerged. This study is not a strict application of multi-dimensional DEA, which uses computer generated ‘frontier analysis’. However, for the purpose of this study research data results were plotted using the Excel programme taking a two-dimensional approach. Currently, myself and Graeme Treasure at UNITEC are analysing the same data set along with non-financial indicators but using frontier analysis software with the intent of publishing the findings shortly.