Estimating Value Creation in the Public University: A Comparison of Deterministic and Stochastic Frontiers

Abstract

Public value creation philosophy is based on the idea that public administration should guide its performance accordingly with the changing times and reconcile effectively its objectives with the appropriate use of its resources. However, in public administration, particularly in organizations characterized by heterogeneity of the mandated functions, this sort of analysis is difficult. In this work, we estimate changes in the value creation of a Spanish public university, specifically the University of Cantabria, over the period 2005-2007. We analyze 31 of its departments with deterministic and stochastic frontiers using panel data. The results reveal information related to productivity and efficiency change through time, as well as their possible causes for each of the evaluated Decision Making Units (DMUs).