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Institutions of Higher Education as Multi-product Firms: Economies of Scale and Scope


  • Cohn, Elchanan
  • Rhine, Sherrie L W
  • Santos, Maria C


A multiple-output cost function is estimated for institutions of higher education in the United States, employing data for 1981-82. The authors flexible fixed cost quadratic function includes three outputs--undergraduate teaching, graduate teaching, and research grants--and one input price--average faculty salaries. Results indicate the existence of scope economies (at least up to a point) for both public and private institutions of higher education. Ray economies of scale are more pronounced in the private sector and product-specific economies of scale are observed only in the public sector for research and graduate teaching. Copyright 1989 by MIT Press.

Suggested Citation

  • Cohn, Elchanan & Rhine, Sherrie L W & Santos, Maria C, 1989. "Institutions of Higher Education as Multi-product Firms: Economies of Scale and Scope," The Review of Economics and Statistics, MIT Press, vol. 71(2), pages 284-290, May.
  • Handle: RePEc:tpr:restat:v:71:y:1989:i:2:p:284-90

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    References listed on IDEAS

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    4. Hamermesh, Daniel S & Wolfe, John R, 1990. "Compensating Wage Differentials and the Duration of Wage Loss," Journal of Labor Economics, University of Chicago Press, vol. 8(1), pages 175-197, January.
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    9. H. Allan Hunt & Alan B. Krueger & John F. Burton Jr., 1988. "The Impact of Open competition in Michigan on the Employers' costs of Workers' Compensation," Book chapters authored by Upjohn Institute researchers,in: Workers' Compensation Insurance Pricing: Current Programs and Proposed Reform, pages 109-144 W.E. Upjohn Institute for Employment Research.
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