Two out of three ain’t bad… or is it?

Posted on: 12 September 2016

From limited resources to ever-increasing enrolments, higher education, and how it should be funded, has been a hot topic recently. Now a new study by Trinity Business School aims to assess the efficiency of third-level institutions for the first time.

Professor Brian Lucey and his colleagues Dr Charles Larkin and Dr Qiantao Zhang, set out to measure the efficiency of Irish higher education institutions in the three key areas of teaching, research, and knowledge transfer.

Here are the main findings of their research:

• Applying models of economic efficiency to all universities and institutes of technology over the 2009-2013 period, researchers found that it may be impossible to efficiency deliver in all three; two of three was the best that can be hoped for. 
• While there are generally increasing returns to research and knowledge transfer across institutions, there is no such evidence on teaching activities. 
• The logical consequence of this is that specialisation may be preferable to generalisation, with some institutions concentrating on teaching and others on research and knowledge transfer. 
• Evidence suggests a massive hit to efficiency in 2010-11 as the first wave of cuts began to work through the system.
• A final observation from researchers was that if a higher level of females was employed by an institution there was improved efficiency.

One of the report's authors Brian Lucey commented: “The evidence is clear that a ‘one size fits all’ approach to higher education institutions’ missions is not appropriate. There is a strong case for specialised research and knowledge transfer-orientated institutions and for teaching-orientated institutions."   

The paper by the Trinity academics applies models of economic efficiency to higher educational institutions. This measures how well, compared to existing best practice, a given institution transforms inputs such as human, physical and financial capital into outputs such as research papers, graduates and commercial spinoffs.

The models used are widely applied globally to measure efficiency in a wide variety of areas such as higher education, agricultural production, industrial production, sports and healthcare.

The research was conducted under the ambit of TIONCHAR, an SFI-funded project to evaluate the impact of state funding of research on national competency. 

Full working paper available here http://papers.ssrn.com/sol3/papers.cfm?abstract_id=2832715