An analysis of the performance of university-affiliated credit unions

In this paper the authors analyze the operating efficiency of a group of university-affiliated credit unions in 1990. They use free disposal hull techniques, which generalize data envelopment analysis (DEA) techniques by dispensing with the convexity assumption imposed in DEA, to measure the operating efficiency of university-affiliated credit unions and to compare their efficiency with that of credit unions not affiliated with a university. The purpose of the analysis is to test the hypothesis that university-affiliated credit unions, by virtue of the superior educational attainment of their members, some of whom sit on boards of directors that monitor managements, are thereby better managed and so perform better. In the second stage of the analysis the authors use seemingly unrelated regression techniques to identify exogenous factors that might explain variation in operating efficiency among the university-affiliated credit unions.