The Index Number Problem with DEA: Insights from European University Efficiency Data

Abstract An increasing effort has been put into dealing with the question of time-series analysis regarding institutional efficiency, including in the area of higher education. Universities are important institutions for economies and societies and are expected to provide excellence as well as efficiency in their processes and outputs. This is reflected in the context of an increased global competitive environment by more refined international university rankings. Combining the two areas, this paper points towards a methodological challenge in comparing different ranking datasets for their use in a data envelopment analysis (DEA) Malmquist index time-series efficiency analysis, namely, index-based data compared to additive data. The problem is discussed in a theoretical framework and complemented with an empirical application: calculations for 70 European universities with budget and staff input data and different ranking output data for the timeframe of 2011–2016 show that there is no evidence for a specific index data problem. Important implications regarding university management and higher education policies are outlined. Efficiency improvements among the analyzed universities are significant but also unevenly distributed and not easy to obtain for individual institutions. View Full-Tex