Comparative Efficiency Analysis of Public and Private Colleges of Multan District: Data Envelope Approach Analysis

Abstract

The purpose of this paper is to evaluate the efficiency of public and private sector colleges in Multan district. We use output oriented data envelopment analysis to measure technical and scale efficiency of a sample of 40 colleges, using data for the year 2014. DEA, which is the most popular technique used to measure the relative efficiency of non-profit organizations due to the absence of prices or relative values of educational outputs, is employed to compare efficiency of both types of colleges. Moreover, it can handle multiple inputs and outputs with great ease. As public and private colleges are working under similar environmental conditions, we have used a single frontier, incorporating four educational inputs and four outputs. The results of the data demonstrate that private colleges lag behind public colleges in terms of CRS and VRS technical efficiency scores and scale efficiency scores. Our study of colleges is in contrast with the dominant paradigm that private colleges outperform the state-run colleges.