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Costs, efficiency, and economies of scale and scope in the English higher education sector

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  • Geraint Johnes
  • Jill Johnes

Abstract

An understanding of the production and cost technology of higher education institutions is of considerable policy interest as it motivates the structure of the sector—how large universities should be, and what mix of outputs they should produce. We review the literature and, using data for English institutions in 2013–14, apply appropriate frontier methods to model the structure of costs in this diverse sector. In doing so, we uncover information about the returns to scale and scope within the higher education sector: in particular, the class of institutions comprising larger research-intensive universities and small specialist institutions could benefit from further concentrating postgraduate and research activity. We find that the universities comprising the English higher education sector are largely efficient (measured relative to observed practices) and that there is little scope for gains in technical efficiency from allocating resources on the basis of efficiency scores.

Suggested Citation

  • Geraint Johnes & Jill Johnes, 2016. "Costs, efficiency, and economies of scale and scope in the English higher education sector," Oxford Review of Economic Policy, Oxford University Press and Oxford Review of Economic Policy Limited, vol. 32(4), pages 596-614.
    • Handle: RePEc:oup:oxford:v:32:y:2016:i:4:p:596-614.
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    File URL: http://hdl.handle.net/10.1093/oxrep/grw023
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    Citations

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    Cited by:

    1. Johnes, Geraint & Johnes, Jill & Virmani, Swati, 2022. "Performance and efficiency in Indian universities," Socio-Economic Planning Sciences, Elsevier, vol. 81(C).
    2. Manuel Salas-Velasco, 2020. "Measuring and explaining the production efficiency of Spanish universities using a non-parametric approach and a bootstrapped-truncated regression," Scientometrics, Springer;Akadémiai Kiadó, vol. 122(2), pages 825-846, February.
    3. Klaus Wohlrabe & Sabine Gralka, 2020. "Using archetypoid analysis to classify institutions and faculties of economics," Scientometrics, Springer;Akadémiai Kiadó, vol. 123(1), pages 159-179, April.
    4. Thiago Caliari & Márcia Siqueira Rapini & Tulio Chiarini, 2020. "Research infrastructures in less developed countries: the Brazilian case," Scientometrics, Springer;Akadémiai Kiadó, vol. 122(1), pages 451-475, January.
    5. Liang-Cheng Zhang & Andrew C. Worthington, 2018. "Explaining Estimated Economies of Scale and Scope in Higher Education: A Meta-Regression Analysis," Research in Higher Education, Springer;Association for Institutional Research, vol. 59(2), pages 156-173, March.
    6. Liu, Qiaochu & Patton, Donald & Kenney, Martin, 2018. "Do university mergers create academic synergy? Evidence from China and the Nordic Countries," Research Policy, Elsevier, vol. 47(1), pages 98-107.
    7. Herberholz, Lars & Wigger, Berthold U., 2021. "Efficiency of European universities: A comparison of peers," Research Policy, Elsevier, vol. 50(9).
    8. Gralka, Sabine, 2018. "Stochastic frontier analysis in higher education: A systematic review," CEPIE Working Papers 05/18, Technische Universität Dresden, Center of Public and International Economics (CEPIE).
    9. Mehdi Rhaiem & Nabil Amara, 2020. "Determinants of research efficiency in Canadian business schools: evidence from scholar-level data," Scientometrics, Springer;Akadémiai Kiadó, vol. 125(1), pages 53-99, October.
    10. Lena Malesevic Perovic & Maja Mihaljevic Kosor, 2020. "The Efficiency of Universities in Achieving Sustainable Development Goals," The AMFITEATRU ECONOMIC journal, Academy of Economic Studies - Bucharest, Romania, vol. 22(54), pages 516-516, April.
    11. Fu, Tsu-Tan & See, Kok Fong, 2022. "An integrated analysis of quality and productivity growth in China’s and Taiwan’s higher education institutions," Economic Analysis and Policy, Elsevier, vol. 74(C), pages 234-249.
    12. Cossani, Gianfranco & Codoceo, Loreto & Cáceres, Hernán & Tabilo, Jorge, 2022. "Technical efficiency in Chile’s higher education system: A comparison of rankings and accreditation," Evaluation and Program Planning, Elsevier, vol. 92(C).

    More about this item

    Keywords

    costs; efficiency; higher education;
    All these keywords.

    JEL classification:

    • I23 - Health, Education, and Welfare - - Education - - - Higher Education; Research Institutions

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