Quality as a latent heterogeneity factor in the efficiency of universities

The 9th RISIS Research Seminar will take place on 10th May from 12.30 to 2 pm (CET)  and will focus on Quality as a latent heterogeneity factor in the efficiency of universities with a presentation of Cinzia Daraio, Sapienza University of Rome. The research has been conducted in collaboration with Leopold Simar and Paul W. Wilson. Joanna Wolszczak-Derlacz, Gdanks University of Technology, is involved as a discussant.



The research shows the usefulness of recent advanced nonparametric efficiency techniques to model the performance of universities in the presence of observed and unobserved heterogeneity. Using directional distances for benchmarking purposes, the researchers identify a latent heterogeneity factor related to the human capital of the universities and their management, which is independent from their size, and interpret the identified latent factor as a “quality” factor of the universities.



After testing the significance of this latent factor, the researchers investigate its impact on the boundary of the production set (efficient frontier) and on the distances of the units from the efficient frontier. The frontier and the efficiency distribution of the European Universities sample appear influenced by the estimated latent quality factor. The study investigates these impacts from various points of view, including the trade-off between our quality factor and efficiency as well as the roles of size and specialization.


Draft paper