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Multi-product cost functions and the funding of tuition in UK universities


  • Geraint Johnes


A quadratic multi-product cost function is estimated for UK universities prior to the abolition of the binary divide. The arguments of the function include linear and interaction terms in undergraduate tuition, postgraduate tuition and research, and in each case these are separately identified for the (broadly defined) arts and sciences. The preferred specification is used to evaluate ray economies of scale, product-specific economies of scale and economies of scope. Estimates of average incremental costs are also provided. Results from OLS and stochastic frontier methods are compared.

Suggested Citation

  • 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.
  • Handle: RePEc:taf:apeclt:v:3:y:1996:i:9:p:557-561 DOI: 10.1080/135048596355943

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    References listed on IDEAS

    1. Hamori, Shigeyuki, 1992. "Test of C-CAPM for Japan: 1980-1988," Economics Letters, Elsevier, vol. 38(1), pages 67-72, January.
    2. Hamori, Shigeyuki, 1993. "Test of the international equity integration of Japan," Economics Letters, Elsevier, vol. 42(1), pages 71-76.
    3. Hamori, Shigeyuki, 1992. "On the structural stability of preference parameters obtained from Japanese financial market data," Economics Letters, Elsevier, vol. 40(4), pages 459-464, December.
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    1. repec:ebl:ecbull:v:4:y:2007:i:15:p:1-9 is not listed on IDEAS
    2. repec:lan:wpaper:4813 is not listed on IDEAS
    3. G. Johnes, 1997. "Costs in UK Higher Education: A System-Wide Perspective," CERT Discussion Papers 9707, Centre for Economic Reform and Transformation, Heriot Watt University.
    4. repec:spr:reihed:v:58:y:2017:i:5:d:10.1007_s11162-016-9434-y is not listed on IDEAS
    5. Johnes, Geraint & Johnes, Jill, 2009. "Higher education institutions' costs and efficiency: Taking the decomposition a further step," Economics of Education Review, Elsevier, vol. 28(1), pages 107-113, February.
    6. repec:lan:wpaper:4381 is not listed on IDEAS
    7. Geraint Johnes, 2007. "Funding Formulae where Costs Legitimately Differ: The Case of Higher Education in England," Education Economics, Taylor & Francis Journals, vol. 15(4), pages 385-404.
    8. repec:lan:wpaper:1058 is not listed on IDEAS
    9. Colin Glass, J. & McCallion, Gillian & McKillop, Donal G. & Rasaratnam, Syamarlah & Stringer, Karl S., 2006. "Implications of variant efficiency measures for policy evaluations in UK higher education," Socio-Economic Planning Sciences, Elsevier, vol. 40(2), pages 119-142, June.
    10. repec:lan:wpaper:1043 is not listed on IDEAS
    11. E Thanassoulis & G Johnes & J Johnes, 2005. "An analysis of costs in institutions of higher education in England," Working Papers 566942, Lancaster University Management School, Economics Department.
    12. Geraint Johnes & Ana S. Camanho & Maria S. Portela, 2008. "Assessing Efficiency Of Portuguese Universities Through Parametric And Non-Parametric Methods," Portuguese Journal of Management Studies, ISEG, Universidade de Lisboa, vol. 0(1), pages 39-66.
    13. repec:lan:wpaper:1121 is not listed on IDEAS
    14. Abbott, M. & Doucouliagos, C., 2003. "The efficiency of Australian universities: a data envelopment analysis," Economics of Education Review, Elsevier, vol. 22(1), pages 89-97, February.
    15. Geraint Johnes & Manuel Salas-Velasco, 2007. "The Determinants Of Costs And Efficiencies Where Producers Are Heterogeneous: The Case Of Spanish Universities," Economics Bulletin, AccessEcon, vol. 4(15), pages 1-9.
    16. Abdullahi Abdulkadri & Michael Langemeier & Allen Featherstone, 2006. "Estimating economies of scope and scale under price risk and risk aversion," Applied Economics, Taylor & Francis Journals, vol. 38(2), pages 191-201.
    17. repec:lan:wpaper:1044 is not listed on IDEAS
    18. repec:lan:wpaper:4509 is not listed on IDEAS
    19. Gralka, Sabine, 2016. "Persistent inefficiency in the higher education sector: Evidence from Germany," CEPIE Working Papers 06/16, Technische Universit├Ąt Dresden, Center of Public and International Economics (CEPIE).

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