Investigating technical and scale efficiencies of Australian universities through data envelopment analysis

Performance indicators in the public sector have often been criticised for being inadequate and not conducive to analysing efficiency. The main objective of this study is to use data envelopment analysis (DEA) to examine the relative efficiency of Australian universities. Three performance models are developed, namely, overall performance, performance on delivery of educational services, and performance on fee-paying enrolments. The findings based on 1995 data show that the university sector was performing well on technical and scale efficiency but there was room for improving performance on fee-paying enrolments. There were also small slacks in input utilisation. More universities were operating at decreasing returns to scale, indicating a potential to downsize. DEA helps in identifying the reference sets for inefficient institutions and objectively determines productivity improvements. As such, it can be a valuable benchmarking tool for educational administrators and assist in more efficient allocation of scarce resources. In the absence of market mechanisms to price educational outputs, which renders traditional production or cost functions inappropriate, universities are particularly obliged to seek alternative efficiency analysis methods such as DEA.

Using DEA [data envelopment analysis] in benchmarking

Australian banks are currently generating huge profits but are they sustainable? NECMI AVKIRAN suggests that banks will need to scrutinise the performance of their networks to ensure future profits.

An introduction to efficiency and productivity analysis

The second edition of An Introduction to Efficiency and Productivity Analysis is designed to be a general introduction for those who wish to study efficiency and productivity analysis. The book provides an accessible, well-written introduction to the four principal methods involved: econometric estimation of average response models; index numbers, data envelopment analysis (DEA); and stochastic frontier analysis (SFA). For each method, a detailed introduction to the basic concepts is presented, numerical examples are provided, and some of the more important extensions to the basic methods are discussed. Of special interest is the systematic use of detailed empirical applications using real-world data throughout the book. In recent years, there have been a number of excellent advance-level books published on performance measurement. This book, however, is the first systematic survey of performance measurement with the express purpose of introducing the field to a wide audience of students, researchers, and practitioners. Indeed, the 2nd Edition maintains its uniqueness: (1) It is a well-written introduction to the field. (2) It outlines, discusses and compares the four principal methods for efficiency and productivity analysis in a well-motivated presentation. (3) It provides detailed advice on computer programs that can be used to implement these performance measurement methods. The book contains computer instructions and output listings for the SHAZAM, LIMDEP, TFPIP, DEAP and FRONTIER computer programs. More extensive listings of data and computer instruction files are available on the book's website: (www.uq.edu.au/economics/cepa/crob2005).

Predicting the HER2 status of breast cancer from basic histopathology data: an analysis of 1500 breast cancers as part of the HER2000 International Study

The tests that are currently available for the measurement of overexpression of the human epidermal growth factor-2 (HER2) in breast cancer have shown considerable problems in accuracy and interlaboratory reproducibility. Although these problems are partly alleviated by the use of validated, standardised 'kits', there may be considerable cost involved in their use. Prior to testing it may therefore be an advantage to be able to predict from basic pathology data whether a cancer is likely to overexpress HER2. In this study, we have correlated pathology features of cancers with the frequency of HER2 overexpression assessed by immunohistochemistry (IHC) using HercepTest (Dako). In addition, fluorescence in situ hybridisation (FISH) has been used to re-test the equivocal cancers and interobserver variation in assessing HER2 overexpression has been examined by a slide circulation scheme. Of the 1536 cancers, 1144 (74.5%) did not overexpress HER2. Unequivocal overexpression (3+ by IHC) was seen in 186 cancers (12%) and an equivocal result (2+ by IHC) was seen in 206 cancers (13%). Of the 156 IHC 3+ cancers for which complete data was available, 149 (95.5%) were ductal NST and 152 (97%) were histological grade 2 or 3. Only 1 of 124 infiltrating lobular carcinomas (0.8%) showed HER2 overexpression. None of the 49 'special types' of carcinoma showed HER2 overexpression. Re-testing by FISH of a proportion of the IHC 2+ cancers showed that only 25 (23%) of those assessable exhibited HER2 gene amplification, but 46 of the 47 IHC 3+ cancers (98%) were confirmed as showing gene amplification. Circulating slides for the assessment of HER2 score showed a moderate level of agreement between pathologists (kappa 0.4). As a result of this study we would advocate consideration of a triage approach to HER-2 testing. Infiltrating lobular and special types of carcinoma may not need to be routinely tested at presentation nor may grade 1 NST carcinomas in which only 1.4% have been shown to overexpress HER2. Testing of these carcinomas may be performed when HER2 status is required to assist in therapeutic or other clinical/prognostic decision-making. The highest yield of HER2 overexpressing carcinomas is seen in the grade 3 NST subgroup in which 24% are positive by IHC. (C) 2003 Elsevier Science Ltd. All rights reserved.

The effect of incentive reforms upon productivity: Evidence from the Vietnamese rice industry

In this study we use region-level panel data on rice production in Vietnam to investigate total factor productivity (TFP) growth in the period since reunification in 1975. Two significant reforms were introduced during this period, one in 1981 allowing farmers to keep part of their produce, and another in 1987 providing improved land tenure. We measure TFP growth using two modified forms of the standard Malmquist data envelopment analysis (DEA) method, which we have named the Three-year-window (TYW) and the Full Cumulative (FC) methods. We have developed these methods to deal with degrees of freedom limitations. Our empirical results indicate strong average TFP growth of between 3.3 and 3.5 per cent per annum, with the fastest growth observed in the period following the first reform. Our results support the assertion that incentive related issues have played a large role in the decline and subsequent resurgence of Vietnamese agriculture.

Monitoring hotel performance

There is a pressing need to address productivity analysis in the hospitality industry if hotels are to exist as sustainable business entities in rapidly maturing markets. Unfortunately, productivity ratios commonly used by managers are narrowly defined. This study illustrates data envelopment analysis of cross-sectional data that benchmark hotels on observed best performances. Data envelopment analysis enables management to integrate unlike multiple inputs and outputs to make simultaneous comparisons. Findings from the cross-sectional data suggest that some of the hotels have the potential to reduce number of beds and number of part-time staff while increasing revenue.

Productivity growth in pre-1990 Mongolian agriculture: Spiralling disaster or emerging success?

The reasons for the spectacular collapse of so many centrally-planned economies are a source of ongoing debate. In this paper, we use detailed farm-level data to measure total factor productivity (TFP) changes in Mongolian grain and potato farming during the 14-year period immediately preceding the 1990 economic reforms. We measure TFP growth using stochastic frontier analysis (SFA) and data envelopment analysis (DEA) methods. Our results indicate quite poor overall performance, with an average annual TFP change of - 1.7% in grain and 0.8% in potatoes, over the 14-year period. However, the pattern of TFP growth changed substantially during this period, with TFP growth exceeding 7% per year in the latter half of this period. This suggests that the new policies of improved education, greater management autonomy, and improved incentives, which were introduced in final two planning periods in the 1980s, were beginning to have a significant influence upon the performance of Mongolian crop farming. Crown Copyright (C) 2002 Published by Elsevier Science B.V. All rights reserved.

Modelling knowledge production performance of research centres with a focus on triple bottom line benchmarking

We demonstrate a portable process for developing a triple bottom line model to measure the knowledge production performance of individual research centres. For the first time, this study also empirically illustrates how a fully units-invariant model of Data Envelopment Analysis (DEA) can be used to measure the relative efficiency of research centres by capturing the interaction amongst a common set of multiple inputs and outputs. This study is particularly timely given the increasing transparency required by governments and industries that fund research activities. The process highlights the links between organisational objectives, desired outcomes and outputs while the emerging performance model represents an executive managerial view. This study brings consistency to current measures that often rely on ratios and univariate analyses that are not otherwise conducive to relative performance analysis.

Developing foreign bank efficiency models for DEA grounded in finance theory

We develop foreign bank technical, cost and profit efficiency models for particular application with data envelopment analysis (DEA). Key motivations for the paper are (a) the often-observed practice of choosing inputs and outputs where the selection process is poorly explained and linkages to theory are unclear, and (b) foreign bank productivity analysis, which has been neglected in DEA banking literature. The main aim is to demonstrate a process grounded in finance and banking theories for developing bank efficiency models, which can bring comparability and direction to empirical productivity studies. We expect this paper to foster empirical bank productivity studies.

Optimal Paths and Costs of Adjustment in Dynamic DEA Models: With Application to Chilean Department Stores

In this paper we propose a range of dynamic data envelopment analysis (DEA) models which allow information on costs of adjustment to be incorporated into the DEA framework. We first specify a basic dynamic DEA model predicated on a number or simplifying assumptions. We then outline a number of extensions to this model to accommodate asymmetric adjustment costs, non-static output quantities, non-static input prices, and non-static costs of adjustment, technological change, quasi-fixed inputs and investment budget constraints. The new dynamic DEA models provide valuable extra information relative to the standard static DEA models-they identify an optimal path of adjustment for the input quantities, and provide a measure of the potential cost savings that result from recognising the costs of adjusting input quantities towards the optimal point. The new models are illustrated using data relating to a chain of 35 retail department stores in Chile. The empirical results illustrate the wealth of information that can be derived from these models, and clearly show that static models overstate potential cost savings when adjustment costs are non-zero.

An EM-based Semi-Parametric Mixture Model Approach to the Regression Analysis of Competing-Risks Data

We consider a mixture model approach to the regression analysis of competing-risks data. Attention is focused on inference concerning the effects of factors on both the probability of occurrence and the hazard rate conditional on each of the failure types. These two quantities are specified in the mixture model using the logistic model and the proportional hazards model, respectively. We propose a semi-parametric mixture method to estimate the logistic and regression coefficients jointly, whereby the component-baseline hazard functions are completely unspecified. Estimation is based on maximum likelihood on the basis of the full likelihood, implemented via an expectation-conditional maximization (ECM) algorithm. Simulation studies are performed to compare the performance of the proposed semi-parametric method with a fully parametric mixture approach. The results show that when the component-baseline hazard is monotonic increasing, the semi-parametric and fully parametric mixture approaches are comparable for mildly and moderately censored samples. When the component-baseline hazard is not monotonic increasing, the semi-parametric method consistently provides less biased estimates than a fully parametric approach and is comparable in efficiency in the estimation of the parameters for all levels of censoring. The methods are illustrated using a real data set of prostate cancer patients treated with different dosages of the drug diethylstilbestrol. Copyright (C) 2003 John Wiley Sons, Ltd.

Repeated occurrence of basal cell carcinoma of the skin and multifailure survival analysis: Follow-up data from the nambour skin cancer prevention trial

The aim of this study was to apply multifailure survival methods to analyze time to multiple occurrences of basal cell carcinoma (BCC). Data from 4.5 years of follow-up in a randomized controlled trial, the Nambour Skin Cancer Prevention Trial (1992-1996), to evaluate skin cancer prevention were used to assess the influence of sunscreen application on the time to first BCC and the time to subsequent BCCs. Three different approaches of time to ordered multiple events were applied and compared: the Andersen-Gill, Wei-Lin-Weissfeld, and Prentice-Williams-Peterson models. Robust variance estimation approaches were used for all multifailure survival models. Sunscreen treatment was not associated with time to first occurrence of a BCC (hazard ratio = 1.04, 95% confidence interval: 0.79, 1.45). Time to subsequent BCC tumors using the Andersen-Gill model resulted in a lower estimated hazard among the daily sunscreen application group, although statistical significance was not reached (hazard ratio = 0.82, 95% confidence interval: 0.59, 1.15). Similarly, both the Wei-Lin-Weissfeld marginal-hazards and the Prentice-Williams-Peterson gap-time models revealed trends toward a lower risk of subsequent BCC tumors among the sunscreen intervention group. These results demonstrate the importance of conducting multiple-event analysis for recurring events, as risk factors for a single event may differ from those where repeated events are considered.