Two dimensional efficiency measurements in Australian TAFE Institutes

Technical and Further Education (TAFE) institutes provide for the majority of Australian government funded courses in vocational education. In this study we used institutional financial, educational, demographic and employed stochastic frontier analysis to develop two distinct efficiency measures. The first model examined institutional efficiency in the transformation of financial resources into teaching loads. The second model evaluated efficiency in the transformation of institutional resources into post-study employment outcomes. In both models we found significant inefficiencies in the Australian TAFE system. We then assessed the relationship between both efficiency measures. While there was no direct linear relationship, a distinct pattern was detectable. K-means cluster analysis was used to establish groupings of similar institutes and subsequent canonical discriminant analysis to develop a typology of these clusters. We conclude that, based on the measures developed in this study, there are inefficiencies in the Australian TAFE system for which an underlying typology exists.