A TOBIT REGRESSION APPROACH BASED ON DEA EFFICIENCY SCORES

Abstract

Data Envelopment Analysis is a powerful technique for measuring the relative efficiency of organizational units with multiple inputs and outputs. This approach was introduced by Charnes, Cooper and Rhodes in 1978, and is gradually becoming a useful management tool. In addition to the efficiency score, Data Envelopment Analysis (DEA) indicates targets for inefficient units. The purpose of this paper is to investigate the performance of fifteen Kingdom of Saudi Arabia universities for the academic year 2013. The study evaluates the technical efficiency of individual Saudi Arabia universities using the nonparametric frontier methodology, the Data Envelopment Analysis (DEA). To investigate the determinants of efficiency, the study use the Tobit regression. This analysis aims to explain the variation in calculated efficiencies to a set of explanatory variables, i.e. total number of students enrolled in undergraduate, graduates, number of academic staff, number of non-academic staff, and number of campuses. In this paper two stage efficiency analyses are applied and used to compare the efficiency of fifteen Saudi Arabia universities using DEA. Two suggested DEA models were used. The study used CRS, and VRS models to measure the efficiency of fifteen Kingdom of Saudi Arabia universities. A second stage the study used the Tobit regression to determine the most environmental factors that affecting the efficiency of this university. The analysis shows that the most influential factors affecting efficiency are the new graduate, graduate last year, previous year graduates PhD, and number of teaching staff.