Measuring Teaching Efficiency in Higher Education : An Application of Data Envelopment Analysis to Economics Graduates from UK Universities

Data envelopment analysis (DEA) is applied to 2547 Economics graduates from UK Universities in 1993 in order to assess teaching efficiency. Following a methodology developed by [Education Economics 10(2) (2002) 183-207], each individual 's efficiency is decomposed into two components: one attributable to the university at which the student studied, and the other attributable to the student himself. From the former component, a measure of each institution' s teaching efficiency is derived and compared to efficiency scores derived from a conventional DEA applied using each Economics department as a decision making unit (DMU). The results suggest that efficiencies derived from DEAs performed at an aggregate level include both institution and individual components, and are therefore misleading. Thus the unit of analysis in a DEA is highly important. Moreover, an analysis at the individual level can give institutions insight into whether it is the students own efforts or the institution' s efficiency which are a constraint on increased efficiency. This has implications for the choice of strategy for improving efficiency