Efficiency analysis of university departments: An empirical study

Universities play an important role in the development of a country in this age of the knowledge economy. As government subsidies to universities have been reducing in recent years, the more efficient use of resources becomes an important issue for university administrators. This paper applies data envelopment analysis (DEA) to assess the relative efficiency of the academic departments at National Cheng Kung University in Taiwan. The outputs considered are total credit-hours, publications, and external grants; and the inputs utilized by the departments are personnel, operating expenses, and floor space. An assurance region is constructed by the top administrators of the university to confine the flexibility in selecting the virtual multipliers in DEA. Four groups of departments of similar characteristics are categorized via an efficiency decomposition and cluster analysis. The aggregate efficiency indicates whether the resources have been utilized efficiently by a department and the efficiency decomposition helps identify the weak areas where more effort should be devoted so that the efficiency of the department can be improved.