Examination and Comparison the Efficiency of Private and Public Iranian Banks Using DEA Technique

The aim of this paper is to apply the Data Envelopment Analysis on the data of the Iranian public and private banks to examine and compare efficiency of them during the period 2008-2012. DEA has become a popular approach in measuring the efficiency of banking industry. The paper employed original Data Envelopment Analysis Models based on an input oriented model to measure the efficiency. It measure Technical Efficiency under constant return to scale (CCR), Managerial Efficiency under variable return to scale (BCC), and Scaled Efficiency. In the period under study, the average technical efficiency was 70%, average managerial efficiency was 90%, and scale efficiency was 77%. The results were unable to uncover significant differences in efficiency between public and private banks in this period. It showed that private sector had more Technical, Managerial, and Scaled Efficiency just for 10%, 5%, and 6% respectively.

Keywords:

public and private banks , Efficiency , Comparison , DEA analysis