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Do Liberal Arts Colleges Exhibit Economies of Scale and Scope?

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  • Rajindar Koshal
  • Manjulika Koshal

Abstract

This study empirically estimates a multiple-product fixed total cost function and output relationship for liberal arts colleges in the United States. Statistical results based on data for 295 private liberal arts colleges suggest that there are both economies of scale and economies of scope in higher education. Furthermore, product-specific economies of scope do exist for all output levels and activities. Research activity at liberal arts colleges is not cost effective.

Suggested Citation

  • Rajindar Koshal & Manjulika Koshal, 2000. "Do Liberal Arts Colleges Exhibit Economies of Scale and Scope?," Education Economics, Taylor & Francis Journals, vol. 8(3), pages 209-220.
    • Handle: RePEc:taf:edecon:v:8:y:2000:i:3:p:209-220
    DOI: 10.1080/096452900750046715
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    1. Baumol, William J, 1982. "Contestable Markets: An Uprising in the Theory of Industry Structure," American Economic Review, American Economic Association, vol. 72(1), pages 1-15, March.
    2. Clotfelter, Charles T. & Ehrenberg, Ronald G. & Getz, Malcolm & Siegfried, John J., 1992. "Economic Challenges in Higher Education," National Bureau of Economic Research Books, University of Chicago Press, edition 1, number 9780226110509, December.
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    Cited by:

    1. Kuo, Jenn-Shyong & Ho, Yi-Cheng, 2008. "The cost efficiency impact of the university operation fund on public universities in Taiwan," Economics of Education Review, Elsevier, vol. 27(5), pages 603-612, October.
    2. Robert E. Martin, 2011. "The College Cost Disease," Books, Edward Elgar Publishing, number 14179.
    3. Robert Baumann & David Chu & Charles Anderton, 2009. "Religious penalty in the U.S. News & World Report college rankings," Education Economics, Taylor & Francis Journals, vol. 17(4), pages 491-504.
    4. Tirivayi, J.N. & Maasen van den Brink, H. & Groot, W.N.J., 2014. "Size and economies of scale in higher education and the implications for mergers," MERIT Working Papers 2014-066, United Nations University - Maastricht Economic and Social Research Institute on Innovation and Technology (MERIT).
    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. Longlong, Hou & Fengliang, Li & Weifang, Min, 2009. "Multi-product total cost functions for higher education: The case of Chinese research universities," Economics of Education Review, Elsevier, vol. 28(4), pages 505-511, August.
    7. Jody W. Lipford & Jerry K. Slice, 2017. "Cost spreading in college athletic spending in the United States: estimates and implications," Education Economics, Taylor & Francis Journals, vol. 25(4), pages 379-393, July.

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