Abstract

The neglected issue of using profit efficiency for the best-practicebenchmarking of UK universities is explored to see whether this supportsthe policy stance of encouraging more specialized university production.The article also investigates whether nonparametric modelling withfinancial ratios, in contrast to nonparametric modelling based on theprices and quantities of each university’s inputs and outputs, can yieldready insights into this profit efficiency issue. The empirical results, usingtwo new approaches, confirm that more specialized university productionyields relatively higher performance on average than less specializedproduction. The results also highlight certain advantages of financial ratios modelling.