What we know about the efficiency of higher education institutions: the best evidence

As higher education enrollments continue expanding, public funding is becoming increasingly scarce. In light of this, many policymakers have come to openly question whether higher education institutions are prudently using the financial resources they receive. Since the early 1990s this issue has prompted a number of efforts at assessing productive and cost efficiency. Yet, at the same time, research in this area has also been driven by advancements in parametric and non-parametric estimation techniques, like data envelopment analysis (DEA) and stochastic frontier estimation (SFE). These tools have finally allowed researchers the flexibility and capability of modeling higher education institutions¿ complex multi-product activities. The result is a growing repository of international empirical studies that are shedding new light on researchers¿ understanding of higher education efficiency. This paper represents an international survey of the empirical literature on higher education efficiency. What common threads tie the different studies together? What methodological similarities and differences exist and what are the implications of using one particular technique over another? How do the efficiency findings from one country¿s higher education system compare to another? Is it even possible to draw such comparisons