A DEA Decision Making Model for Higher Education Funding

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Funding Higher Education (HE) in Mexico has been a topic of endless discussion. Both universities and government feel the current funding distribution process is not appropriate. The current funding mechanism consists of annual budgets given unconditionally to the universities; the allocation is not associated with inputs/outputs to the HE system, but is simply related to the previous budget plus an additional fund. This system clearly does not provide incentive for outstanding performance, just as it does not punish poor performance. This book presents a methodology to develop an efficiency- based decision-making model that will provide with a more accountable funding distribution process for the 34 Mexican Public State Universities. The method was developed using the data envelopment analysis decision theory framework. 24 alternative cases were developed using different variables. The model describes the performance efficiencies of the universities based on inputs and outputs to the HE system and proposes future funding based on those measurements.