Multi-product Cost Functions for Universities: Economies of Scale and Scope

Cohn, Elchanan; Cooper, Samuel

doi:10.4337/9781845421694.00020

Cited by 27 publications

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“…As distance education has become an important educational output of general HEIs, some scholars believe that it is necessary to study its economies of scope (Cohn & Cooper, 2004;Morris, 2008). Since Chinese universities started to offer distance higher education in 1998, 70 general universities have been qualified as providers.…”

Section: Resultsmentioning

confidence: 99%

Economies of scope in distance education: The case of Chinese research universities

Chen

2012

IRRODL

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<span>With the rapid development of information technologies, distance education has become “another form of product differentiation in the output mix produced by the multi-product university or college” (Cohn & Cooper, 2004, p. 607). This article aims at analyzing the economies of scope of distance education (as an educational output) in Chinese research universities. The empirical results show that a) product-specific economies of scope do exist in distance education programs offered by Chinese research universities; b) there are economies of scale in distance education; and c) there are weak cost complementarities between distance education and research output, meaning that distance education and academic research can promote each other to reduce the costs in Chinese research universities.</span><br /><input id="gwProxy" type="hidden" /><input id="jsProxy" onclick="if(typeof(jsCall)=='function'){jsCall();}else{setTimeout('jsCall()',500);}" type="hidden" />

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Section: Resultsmentioning

confidence: 99%

Economies of scope in distance education: The case of Chinese research universities

Chen

2012

IRRODL

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“…Apart from the higher education reforms, the cutting-edge information and communication technology (ICT) that has been adopted and diffused in nearly all industries and sectors over the last decades might have further enabled HEIs to position themselves in the market as a leading player in terms of advanced technology use or in terms of cost savings, or both (Schneckenberg, 2009;Cohn and Cooper, 2004;McCann et al, 1998). The implementation of new ICT in HEIs has resulted not only in major professional and cultural changes for the faculty, but has also affected the organisation itself by resulting changes in teaching methods, work processes, avenues for recognition and research opportunities (Marshall, 2010;Fisser, 2001).…”

Section: Hypothesesmentioning

confidence: 99%

“…HEIs are likely to realise economies of scale if they experience lower per unit costs by expanding their outputs (Cohn and Cooper, 2004). In other words, efficient HEIs must be large enough in terms of student numbers and research activities to ensure full utilisation of their assets and infrastructure entities like class and computer rooms or libraries and laboratories equipped with machinery and other techniques.…”

Section: Hypothesesmentioning

confidence: 99%

The Dynamics of Productivity in the Swiss and German University Sector: A Non-Parametric Analysis that Accounts for Heterogeneous Production

Olivares

Schenker‐Wicki

2012

SSRN Journal

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Based on a disaggregate cross-country analysis, we investigate the performance of 10 public Swiss universities and 77 public German universities from [2001][2002][2003][2004][2005][2006][2007]. During this period the universities in both countries have faced two major reforms aimed at improving efficiency and productivity in the European higher education sector. We assess the change in productivity and its sources, that is technological change, technical efficiency change and scale effects, obtained by computing the non-parametric Malmquist productivity index by benchmarking the non-science disciplines and the science disciplines of both countries separately against a common frontier. Given the lack of statistical inference of non-parametric productivity analyses, we employ bootstrapping techniques and estimate confidence intervals, allowing us to verify the statistical significance of our results. The results indicate that improvements in technical efficiency were by far the most important driver for productivity growth, followed by gains realised through exploiting economies of scale; thereby technological change partly reduced the increases in productivity. Our findings, however, suggest reform-related differences between the Swiss and the German public university sector. Further, the results point to structural differences across the scientific disciplines, as we found divergent patterns for the development in productivity and its sources in the non-sciences and the sciences.

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“…HEIs produce multiple outputs from multiple inputs, and so previous work has generally utilised the cost function to analyse how changing inputs (and hence cost) can affect output production (Cohn et al 1989;Glass et al 1995b;Johnes 1996a;Hashimoto and Cohn 1997;Glass et al 1998;Izadi et al 2002;Cohn and Cooper 2004;Johnes et al 2005;Stevens 2005;Johnes et al 2008;Worthington and Higgs 2008;Johnes and Johnes 2009). The cost function, whilst a convenient tool of analysis in a multi-output, multiinput context, is not appropriate if input prices are not available, or if cost minimizing behaviour does not apply (Coelli and Perelman 1999).…”

Section: Introductionmentioning

confidence: 99%

Efficiency and Input- and Output-Substitutability in English Higher Education 1996/97 to 2007/08: A Parametric Distance Function Approach

Johnes

2010

SSRN Journal

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HEIs are likely to face tight fiscal constraints in the future. This paper uses random effects and stochastic frontier techniques to estimate an output distance function over the period 1997/97 to 2007/08 in order to investigate the efficiency of higher education institutions (HEIs) and to examine the opportunities for substitution between inputs. Mean efficiency across the whole sector is estimated to be 70%, and further investigation reveals that the pattern of production in the typical institution in the highest efficiency quartile is closest to the pattern of production of the average pre-1992 university. The Morishima elasticities calculated from the parameter estimates suggest that the main possibilities for substitution are out of undergraduates into other inputs and from administration into other inputs (except academic services). Opportunities for substitution are generally much more limited from postgraduate inputs, staff and academic services. A simple examination of the effects of merger activity reveals that it takes place amongst institutions which are typically performing at the same level as non-merging HEIs, and that it has beneficial effects in terms of efficiency. JEL Classification:I23, C01, C33, D24

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Multi-product Cost Functions for Universities: Economies of Scale and Scope

Cited by 27 publications

References 0 publications

Economies of scope in distance education: The case of Chinese research universities

Economies of scope in distance education: The case of Chinese research universities

The Dynamics of Productivity in the Swiss and German University Sector: A Non-Parametric Analysis that Accounts for Heterogeneous Production

Efficiency and Input- and Output-Substitutability in English Higher Education 1996/97 to 2007/08: A Parametric Distance Function Approach

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