Is The Production of Religious Knowledge Efficient? Managing Faith Related Postsecondary Institutions

The focus of this paper is on the efficiency of producing and managing religion based knowledge in postsecondary institutions. Panel data is used to estimate a stochastic cost frontier and associated inefficiencies for a panel of 222 U.S. bible colleges, theological seminaries, and other faith based higher education institutions over the 2005-09 academic years. Results indicate that institutions offering undergraduate only education are on average less inefficient than graduate only or combined undergraduate-graduate education institutions. Government provided student loans and private philanthropy are efficiency improving, while institutional debt acts to increase inefficiency. Time varying inefficiencies show efficiency gains over the last two of the four academic years. However, additional observations will be required to determine whether that is a managerial reaction to the global financial crisis and if it is sustainable in future academic years.