Efficiency Analyses of Higher Education in Taiwan: Implications to Higher Education Crisis
This study applies nonparametric DEA to analyze Taiwan’s 46 comprehensive and 73 technical universities from 2012 to 2017. The inter-category comparison of efficient universities percentage reveals that, on the whole, private universities outperform public universities in the same category. In addition, comprehensive universities outperform technical universities. However, the trend analyses confirm that facing the challenge of the higher education crisis, performance improvement is much more urgent for PriCU, PubTECH and PriTECH than for PubCU, especially for PriTECH. The crisis in higher education has hit private universities harder than public ones, and technical universities harder than comprehensive ones, and is worsening fast. Moreover, for PubCU, PubTECH, and PriTECH to better their overall operational efficiency, facilitating management efficiency or innovating teaching and research are equally crucial with optimizing operational scale. Conversely, for PriCU, they should, first of all, put more emphasis on scale efficiency improvement to boom their efficiencies. In terms of scale efficiency, it is required to together consider pure technical efficiency and scale return, and thus seems no merger combinations can better their efficiencies and simultaneously solve their urgent crisis. That thus suggests PriCU, PubTECH, and PriTECH should take other ways, such as to raise income from outputs other than tuition fees, rather than a merger, to reduce the shock as could as possible and thus improve their scale efficiency. Finally, the robustness test suggests consolidated estimation is a more objective and fair evaluation of university efficiency.
[1] Gordon, N., and Knight, B. (2008). The effects of school district
consolidation on educational cost and quality. Public Finance Review,
36(4), 408–430.
[2] DeLuca, T. A. (2013). K-12 non-instructional service consolidation:
Spending changes and scale economies. Journal of Education Finance,
39(2), 150–173.
[3] Beuchert, L. V., Humlum, M. K., Nielsen, H. S., and Smith, N. (2016).
The short-term effects of school consolidation on student achievement:
Evidence of disruption? IZA Discussion Paper No. 10195.
[4] Russell, Lauren (2019) Better outcomes without increased costs? Effects
of Georgia’s University System consolidations. Economics of Education
Review, 68, 122–135.
[5] Capuccinello, R. I., and Bradley, S. (2014). The effect of college mergers
on student dropout behaviour: Evidence from the UK. Lancaster
University Management School Working Paper 007.
[6] Fu, T., Huang, C., and Yang, Y. (2011). Quality and economies of scale in
higher education: A semiparametric smooth coefficient estimation.
Contemporary Economic Policy, 29(1), 138–149.
[7] Johnes, G. (1998). The costs of multi-product organizations and the
heuristic evaluation of industrial structure. Socio-Economic Planning
Sciences, 32(3), 199–209.
[8] Andrews, M., Duncombe, W., and Yinger, J. (2002). Revisiting
economies of size in American education: Are we any closer to a
consensus?. Economics of Education Review, 21(3), 245–262.
[9] Schiltza, Fritz and De Witte, Kristof (2017). Estimating scale economies
and the optimal size of school districts: A flexible form approach. British
Educational Research Journal, 43 (6), 1048–1067.
[10] Fu, T., Huang, C. J., and Tien, F. (2008). University cost structure in
Taiwan. Contemporary Economic Policy, 26(4), 651–662.
[11] Johnes, G., and Johnes, J. (2016). Costs, effificiency, and economies of
scale and scope in the English higher education sector. Oxford Review of
Economic Policy, 32(4), 596–614
[12] Zhang, L.-C., and Worthington, A. C. (2018). Explaining estimated
economies of scale and scope in higher education: a meta-regression
analysis, Research in Higher Education 59, 156–173.
[13] Cohn, E., Rhine, S., and Santos, M. (1989). Institutions of higher
education as multi-product firms: Economies of scale and scope. The
Review of Economics and Statistics, 71(2), 284–290.
[14] Chavas, J., Barham, B., Foltz, J., and Kim, K. (2012). Analysis and
decomposition of scope economies: R&D at US research universities.
Applied Economics, 44(10–12), 1387–1404.
[15] Verry, D. W., and Layard, P. R. G. (1975). Cost functions for university
teaching and research. Economic Journal, 85, 55–74.
[16] de Groot, H., McMahon, W. W., and Volkwein, J. F. (1991). The cost
structure of American research universities. The Review of Economics
and Statistics, 73, 424–431.
[17] Fu, T. (2011). School Quality, Operational Efficiency, and Optimal Size:
An Analysis of Higher Education Institutions in Taiwan. Journal of
Research in Education Sciences, 56(3), 181–213.
[18] Anthanassopoulos, A. D. and Shale, E. (1997). Assessing the comparative
Efficiency of higher education institutions in the UK by means of data
envelopment analysis. Education Economics, 5(2), 117-134.
[19] Zhuo, C. Y. Chen, Y. X. and Lin, S. H. (2015). A Study on the
Operational Efficiency of Higher Education in Taiwan: An Application of
Metafrontier Cost Model. Educational Policy Forum, 18(4), 1–32.
[20] Carrington, R., O'Donnell, C. and Prasada Rao, D. S. (2018). Australian
university productivity growth and public funding revisited. Studies in
Higher Education, 43(8),1417–1438.
[21] Agasisti, T. and Bonomi, F.(2014). Benchmarking Universities
Efficiency Indicators in the Presence of Internal Hetrogeneity. Studies in
Higher Education, 39, 1237–55.
[22] The Laws & Regulations database, Ministry of Justice of Taiwan.
National University Endowment Fund Establishment Act, Article 3.
https://law.moj.gov.tw/ENG/LawClass/LawAll.aspx?pcode=H0030025.
[23] Farrell, M. J. (1957). The Measurement of Productive Efficiency. Journal
of the Royal Statistical Society, 125, 252–267.
[24] Charnes, A., Cooper, W. W., and Rhodes, E. (1978). Short
Communication: Measuring the Efficiency of Decision Making Units.
European Journal of Operational Research, 2, 429-444.
[25] Banker, R. D., Charnes, A., and Cooper, W. W. (1984). Some Models for
Estimating Technical and Scale Inefficiencies in Data Envelopment
Analysis. Management Science, 30, 1078-1092.
[1] Gordon, N., and Knight, B. (2008). The effects of school district
consolidation on educational cost and quality. Public Finance Review,
36(4), 408–430.
[2] DeLuca, T. A. (2013). K-12 non-instructional service consolidation:
Spending changes and scale economies. Journal of Education Finance,
39(2), 150–173.
[3] Beuchert, L. V., Humlum, M. K., Nielsen, H. S., and Smith, N. (2016).
The short-term effects of school consolidation on student achievement:
Evidence of disruption? IZA Discussion Paper No. 10195.
[4] Russell, Lauren (2019) Better outcomes without increased costs? Effects
of Georgia’s University System consolidations. Economics of Education
Review, 68, 122–135.
[5] Capuccinello, R. I., and Bradley, S. (2014). The effect of college mergers
on student dropout behaviour: Evidence from the UK. Lancaster
University Management School Working Paper 007.
[6] Fu, T., Huang, C., and Yang, Y. (2011). Quality and economies of scale in
higher education: A semiparametric smooth coefficient estimation.
Contemporary Economic Policy, 29(1), 138–149.
[7] Johnes, G. (1998). The costs of multi-product organizations and the
heuristic evaluation of industrial structure. Socio-Economic Planning
Sciences, 32(3), 199–209.
[8] Andrews, M., Duncombe, W., and Yinger, J. (2002). Revisiting
economies of size in American education: Are we any closer to a
consensus?. Economics of Education Review, 21(3), 245–262.
[9] Schiltza, Fritz and De Witte, Kristof (2017). Estimating scale economies
and the optimal size of school districts: A flexible form approach. British
Educational Research Journal, 43 (6), 1048–1067.
[10] Fu, T., Huang, C. J., and Tien, F. (2008). University cost structure in
Taiwan. Contemporary Economic Policy, 26(4), 651–662.
[11] Johnes, G., and Johnes, J. (2016). Costs, effificiency, and economies of
scale and scope in the English higher education sector. Oxford Review of
Economic Policy, 32(4), 596–614
[12] Zhang, L.-C., and Worthington, A. C. (2018). Explaining estimated
economies of scale and scope in higher education: a meta-regression
analysis, Research in Higher Education 59, 156–173.
[13] Cohn, E., Rhine, S., and Santos, M. (1989). Institutions of higher
education as multi-product firms: Economies of scale and scope. The
Review of Economics and Statistics, 71(2), 284–290.
[14] Chavas, J., Barham, B., Foltz, J., and Kim, K. (2012). Analysis and
decomposition of scope economies: R&D at US research universities.
Applied Economics, 44(10–12), 1387–1404.
[15] Verry, D. W., and Layard, P. R. G. (1975). Cost functions for university
teaching and research. Economic Journal, 85, 55–74.
[16] de Groot, H., McMahon, W. W., and Volkwein, J. F. (1991). The cost
structure of American research universities. The Review of Economics
and Statistics, 73, 424–431.
[17] Fu, T. (2011). School Quality, Operational Efficiency, and Optimal Size:
An Analysis of Higher Education Institutions in Taiwan. Journal of
Research in Education Sciences, 56(3), 181–213.
[18] Anthanassopoulos, A. D. and Shale, E. (1997). Assessing the comparative
Efficiency of higher education institutions in the UK by means of data
envelopment analysis. Education Economics, 5(2), 117-134.
[19] Zhuo, C. Y. Chen, Y. X. and Lin, S. H. (2015). A Study on the
Operational Efficiency of Higher Education in Taiwan: An Application of
Metafrontier Cost Model. Educational Policy Forum, 18(4), 1–32.
[20] Carrington, R., O'Donnell, C. and Prasada Rao, D. S. (2018). Australian
university productivity growth and public funding revisited. Studies in
Higher Education, 43(8),1417–1438.
[21] Agasisti, T. and Bonomi, F.(2014). Benchmarking Universities
Efficiency Indicators in the Presence of Internal Hetrogeneity. Studies in
Higher Education, 39, 1237–55.
[22] The Laws & Regulations database, Ministry of Justice of Taiwan.
National University Endowment Fund Establishment Act, Article 3.
https://law.moj.gov.tw/ENG/LawClass/LawAll.aspx?pcode=H0030025.
[23] Farrell, M. J. (1957). The Measurement of Productive Efficiency. Journal
of the Royal Statistical Society, 125, 252–267.
[24] Charnes, A., Cooper, W. W., and Rhodes, E. (1978). Short
Communication: Measuring the Efficiency of Decision Making Units.
European Journal of Operational Research, 2, 429-444.
[25] Banker, R. D., Charnes, A., and Cooper, W. W. (1984). Some Models for
Estimating Technical and Scale Inefficiencies in Data Envelopment
Analysis. Management Science, 30, 1078-1092.
@article{"International Journal of Business, Human and Social Sciences:79669", author = "Chiou Rung Chen", title = "Efficiency Analyses of Higher Education in Taiwan: Implications to Higher Education Crisis", abstract = "This study applies nonparametric DEA to analyze Taiwan’s 46 comprehensive and 73 technical universities from 2012 to 2017. The inter-category comparison of efficient universities percentage reveals that, on the whole, private universities outperform public universities in the same category. In addition, comprehensive universities outperform technical universities. However, the trend analyses confirm that facing the challenge of the higher education crisis, performance improvement is much more urgent for PriCU, PubTECH and PriTECH than for PubCU, especially for PriTECH. The crisis in higher education has hit private universities harder than public ones, and technical universities harder than comprehensive ones, and is worsening fast. Moreover, for PubCU, PubTECH, and PriTECH to better their overall operational efficiency, facilitating management efficiency or innovating teaching and research are equally crucial with optimizing operational scale. Conversely, for PriCU, they should, first of all, put more emphasis on scale efficiency improvement to boom their efficiencies. In terms of scale efficiency, it is required to together consider pure technical efficiency and scale return, and thus seems no merger combinations can better their efficiencies and simultaneously solve their urgent crisis. That thus suggests PriCU, PubTECH, and PriTECH should take other ways, such as to raise income from outputs other than tuition fees, rather than a merger, to reduce the shock as could as possible and thus improve their scale efficiency. Finally, the robustness test suggests consolidated estimation is a more objective and fair evaluation of university efficiency.
", keywords = "data envelopment analysis (DEA), technical efficiency, pure technical efficiency, scale efficiency", volume = "14", number = "6", pages = "486-10", }
