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Evaluating the productive performance of UK universities as cost-constrained revenue maximizers: an empirical analysis

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  • J. C. Glass
  • D. G. McKillop
  • G. O'Rourke

Abstract

The study presents an empirical analysis of the relative revenue efficiency of UK universities in providing teaching and research. With government policies pressurizing the largely public-funded universities to secure efficiency in both input usage and output revenue, university producers are modelled as cost-constrained revenue maximizers. Taking explicit account of the quality of research output, the methodology uses linear programming techniques to construct nonparametric cost indirect production frontiers and to compute revenue efficiency relative to these frontiers. Revenue efficiency is then decomposed into its (output) allocative and technical components. Further analysis investigates the sources of allocative and technical inefficiencies.

Suggested Citation

  • J. C. Glass & D. G. McKillop & G. O'Rourke, 2002. "Evaluating the productive performance of UK universities as cost-constrained revenue maximizers: an empirical analysis," Applied Economics, Taylor & Francis Journals, vol. 34(9), pages 1097-1108.
    • Handle: RePEc:taf:applec:v:34:y:2002:i:9:p:1097-1108
    DOI: 10.1080/00036840110088119
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    References listed on IDEAS

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    1. Beasley, J. E., 1990. "Comparing university departments," Omega, Elsevier, vol. 18(2), pages 171-183.
    2. Glass, J C & McKillop, Donal G & Hyndman, N, 1995. "Efficiency in the Provision of University Teaching and Research: An Empirical Analysis of UK Universities," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 10(1), pages 61-72, Jan.-Marc.
    3. Fare, R. & Grosskopf, S. & Lovell, C. A. K., 1988. "An indirect approach to the evaluation of producer performance," Journal of Public Economics, Elsevier, vol. 37(1), pages 71-89, October.
    4. Geraint Johnes, 1996. "Multi-product cost functions and the funding of tuition in UK universities," Applied Economics Letters, Taylor & Francis Journals, vol. 3(9), pages 557-561.
    5. Johnes, Geraint, 1997. "Costs and Industrial Structure in Contemporary British Higher Education," Economic Journal, Royal Economic Society, vol. 107(442), pages 727-737, May.
    6. Geraint Johnes, 1995. "Scale and technical efficiency in the production of economic research," Applied Economics Letters, Taylor & Francis Journals, vol. 2(1), pages 7-11.
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    Cited by:

    1. Kraus, Margit, 2004. "Schätzung von Kostenfunktionen für die bundesdeutsche Hochschulausbildung: Ein konzeptioneller Ansatz im empirischen Test," ZEW Discussion Papers 04-36, ZEW - Leibniz Centre for European Economic Research.
    2. Valadkhani, Abbas & Ville, Simon, 2008. "Identifying the Most Research Intensive Faculties of Business in Australia: A Multidimensional Approach," Economics Working Papers wp08-03, School of Economics, University of Wollongong, NSW, Australia.
    3. Pol, Eduardo & Ville, Simon, 2009. "Social innovation: Buzz word or enduring term?," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 38(6), pages 878-885, December.
    4. Mehdi Rhaiem, 2017. "Measurement and determinants of academic research efficiency: a systematic review of the evidence," Scientometrics, Springer;Akadémiai Kiadó, vol. 110(2), pages 581-615, February.
    5. Glass, J.C. & McCallion, G. & McKillop, D.G. & Stringer, K., 2006. "A 'technically level playing-field' profit efficiency analysis of enforced competition between publicly funded institutions," European Economic Review, Elsevier, vol. 50(6), pages 1601-1626, August.

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