AN ANALYSIS OF THE PERFORMANCE OF UNIVERSITY-AFFILIATED CREDIT UNIONS

In this paper we analyze the operating efficiency of a group of univer sity-affiliate credit unions in 1990. We use free disposal hull (FDH) techniques, which generalize data envelopment analysis (DEA) technique s by dispensing with the convexity assumption imposed in DEA, to measu re the operating efficiency of university-affliated 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 hypothes is that university-affiliate 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 we use seemingly unrelated regression (SUR) techniques to identify exogenous factors th at might explain variation in operating efficiency among the universit y-affiliated credit unions.