Multiproduct Cost Function Estimation for American Higher Education: Economies of Scale and Scope
Following Cohn, Rhine and Santos (1989) and Koshal and Koshal (1999),we use American data, i.e., a matched data set of 730 private and 820 public colleges and universities, to estimate multi-product cost functions in higher education. We use federal research grants as a proxy for research output and independent rankings of colleges as a quality proxy. We found that private and public schools have different cost functions. We obtained robust cost functions for private institutions. In those schools, economies of scope are present throughout. There are also economies of scale to a point that is above the size of an average private institution. The marginal cost of educating undergraduates is decreasing, while that of graduate students is increasing. The value of the endowment of private institutions is positively correlated with their costs.
|Date of creation:||Dec 2001|
|Date of revision:|
|Contact details of provider:|| Postal: |
Phone: (+36-1) 309-2652
Fax: (36-1) 319-3136
Web page: http://econ.core.hu
More information through EDIRC
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Breusch, T S & Pagan, A R, 1979. "A Simple Test for Heteroscedasticity and Random Coefficient Variation," Econometrica, Econometric Society, vol. 47(5), pages 1287-94, September.
- Goudriaan, Rene & de Groot, Hans, 1993. "State regulation and university behavior," Journal of Economic Behavior & Organization, Elsevier, vol. 20(3), pages 309-318, April.
- Koshal, Rajindar K. & Koshal, Manjulika, 1999. "Economies of scale and scope in higher education: a case of comprehensive universities," Economics of Education Review, Elsevier, vol. 18(2), pages 269-277, April.
- de Groot, Hans & McMahon, Walter W & Volkwein, J Fredericks, 1991. "The Cost Structure of American Research Universities," The Review of Economics and Statistics, MIT Press, vol. 73(3), pages 424-31, August.
- Estelle James, 1978. "Product Mix and Cost Disaggregation: A Reinterpretation of the Economics of Higher Education," Journal of Human Resources, University of Wisconsin Press, vol. 13(2), pages 157-186.
- Michael Rothschild & Lawrence J. White, 1991.
"The University in the Marketplace: Some Insights and Some Puzzles,"
NBER Working Papers
3853, National Bureau of Economic Research, Inc.
- Michael Rothschild & Lawrence J. White, 1993. "The University in the Marketplace: Some Insights and Some Puzzles," NBER Chapters, in: Studies of Supply and Demand in Higher Education, pages 11-42 National Bureau of Economic Research, Inc.
- János Kornai, 2014.
"The soft budget constraint,"
Akadémiai Kiadó, Hungary, vol. 64(supplemen), pages 25-79, November.
- Rilstone, Paul, 1991. "Some Monte Carlo Evidence on the Relative Efficiency of Parametric and Semiparametric EGLS Estimators," Journal of Business & Economic Statistics, American Statistical Association, vol. 9(2), pages 179-87, April.
- Dundar, Halil & Lewis, Darrell R., 1995. "Departmental productivity in American universities: Economies of scale and scope," Economics of Education Review, Elsevier, vol. 14(2), pages 119-144, June.
- 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 284-90, May.
When requesting a correction, please mention this item's handle: RePEc:has:discpr:0111. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Adrienn Foldi)
If references are entirely missing, you can add them using this form.