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Higher education institutions' costs and efficiency: taking the decomposition a further step

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  • G Johnes
  • J Johnes

Abstract

A multiproduct cost function is estimated for English higher education institutions using a panel of data from recent years. The panel approach allows estimation by means of a random parameter stochastic frontier model which provides considerable new insights in that it allows the impact on costs of inter-institutional differences in the cost function itself to be distinguished from inter-institutional differences in efficiency. The approach used here therefore resembles in some respects the non-parametric methods of efficiency evaluation. We report also on measures of average incremental cost of provision and on returns to scale and scope.

Suggested Citation

  • G Johnes & J Johnes, 2005. "Higher education institutions' costs and efficiency: taking the decomposition a further step," Working Papers 574007, Lancaster University Management School, Economics Department.
    • Handle: RePEc:lan:wpaper:574007
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    1. Izadi, Hooshang & Johnes, Geraint & Oskrochi, Reza & Crouchley, Robert, 2002. "Stochastic frontier estimation of a CES cost function: the case of higher education in Britain," Economics of Education Review, Elsevier, vol. 21(1), pages 63-71, February.
    2. Johnes, Geraint, 1997. "Costs and Industrial Structure in Contemporary British Higher Education," Economic Journal, Royal Economic Society, vol. 107(442), pages 727-737, May.
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