Measuring the efficiency of universities: a comparison of multilevel modelling and data envelopment analysis

Data envelopment analysis (DEA) and multilevel modelling (MLM) are applied to a data set of 54578 graduates from UK universities in 1993 in order to assess the teaching performance of universities. A methodology developed by Thanassoulis & Portela (2002) allows each individual's DEA efficiency score to be decomposed into two components: one attributable to the university at which the student studied, and the other attributable to the individual student. From the former component a measure of each institution's teaching efficiency is derived and compared to the university effects from various multilevel models. The comparisons are made within four broad subjects: pure science; applied science; social science and arts. The results show that the rankings of universities derived from the DEA efficiencies which measure the universities'' own performance (i.e. having excluded the efforts of the individuals) are not strongly correlated with the university rankings derived from the university effects of the multilevel models. The data were also used to perform various university-level DEAs. The university efficiency scores derived from these DEAs are largely unrelated to the scores from the individual-level DEAs, confirming a result from a smaller data set (Johnes 2003). However, the university-level DEAs provide efficiency scores which are generally strongly related to the university effects of the multilevel models.