Productivity, Efficiency, and Managerial Performance Regress and Gains in United States Universities: A Data Envelopment Analysis

This paper uses data envelopment analysis to investigate the extent to which universities in the United States have undergone productivity and efficiency changes, partly due to managerial performance, during the 2005-09 academic years. Using panel data for 133 research and doctoral universities, the focus is on the primary drivers of U.S. publicly controlled higher education. DEA efficiency and returns to scale estimates are provided. In addition, university total factor productivity changes via the Malmquist index are decomposed into component parts. Results suggest that U.S. universities experienced average productivity regress. On an annual basis such was present prior to the global financial crisis. However, productivity gains appeared in concert with the crisis. Managerial efficiency tended to hamper productivity gains but, on the positive side, showed slight improvements over time. Decreasing returns to scale prevailed but from a policy perspective a return to economy wide growth may automatically correct some over production.