Efficiency analysis of Turkish higher education in state and foundation universities: Stochastic frontier model

Estimates of the efficiency of higher education institutions have become a central field of research in the literature of efficiency analysis, especially in the last two decades. In Turkey the number of studies on the efficiency of higher education institutions have increased in this period. Almost all of the efficiency measurements of the efficiency of higher education institutions in Turkey are made using the Data Envelopment Analysis (DEA) method higher education institutions in Turkey are seen to be done by the Data Envelopment Analysis (DEA), which is a non-parametric technique. The use of Stochastic Frontier Analysis (SFA), which is a parametric method of efficiency, is quite restricted, though. This study examines the cost efficiency of 91 state and 25 foundation universities operating in Turkey for 5 years covering 2010-2011 and 2014-2015 by using SFA method unlike DEA. The analysis has been performed using the Cobb-Douglass cost function form. The SFA estimation results show that the performance of higher education institutions is quite scattered from 50% to 90%. In addition, in all the models discussed, it is seen that efficiency scores decreased from 2010 until 2014. When decision-making units take into consideration this finding, they must allocate more budget for state universities and must be cautious about resource transfer for foundation universities. Moreover, the effect of the exogenous variables used in the study on the total cost vary. For instance, the increase in the workload of academic staff and the proportion of professors in teaching staff decrease the total costs while the university age increases the total costs. Although the increase in the workload of academic staff leads to a decrease in teaching and research qualifications, it significantly decreases the total costs of the universities.