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The Cost Structure of Higher Education in Further Education Colleges in England

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Listed author(s):
  • Pamela Lenton

    ()

    (Department of Economics, The University of Sheffield)

Abstract

This paper examines the cost of the provision of higher education courses within further education colleges in England. The further education sector is complex because of the wide range of courses it provides both in terms of subject type and of qualification level. We believe this to be the first attempt to fit a cost function specifically to the further education sector. Cost functions for a sample of 96 colleges over a two-year period, from 2000 to 2002, are fitted using a panel data methodology as well as stochastic frontier analysis. Our findings indicate that most further education colleges are able to benefit from economies of scale. Results from both methodologies suggest the presence of product-specific economies of scale, substantial ray economies of scale and that higher education classroom-based courses, such as business studies, along with vocational courses display substantial economies of scope.

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File URL: http://www.shef.ac.uk/content/1/c6/05/73/19/SERP2006010.pdf
File Function: Revised version, 2006
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Paper provided by The University of Sheffield, Department of Economics in its series Working Papers with number 2006010.

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Length: 26 pages
Date of creation: Sep 2006
Date of revision: Sep 2006
Handle: RePEc:shf:wpaper:2006010
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Keywords: Stochastic frontier; Education;

Other versions of this item:

Find related papers by JEL classification:
  • C21 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Cross-Sectional Models; Spatial Models; Treatment Effect Models
  • C23 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Models with Panel Data; Spatio-temporal Models
  • I21 - Health, Education, and Welfare - - Education - - - Analysis of Education

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  1. Getz, Malcolm & Siegfried, John J. & Zhang, Hao, 1991. "Estimating economies of scale in higher education," Economics Letters, Elsevier, vol. 37(2), pages 203-208, October.
  2. Verry, D W & Layard, P R G, 1975. "Cost Functions for University Teaching and Research," Economic Journal, Royal Economic Society, vol. 85(337), pages 55-74, March.
  3. Barr, Nicholas, 2004. "Economics of the Welfare State," OUP Catalogue, Oxford University Press, edition 4, number 9780199264971, April.
  4. 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.
  5. Nerlove, Marc, 1971. "A Note on Error Components Models," Econometrica, Econometric Society, vol. 39(2), pages 383-396, March.
  6. 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.
  7. Glass, J C & McKillop, Donal G & Hyndman, N, 1995. "Efficiency in the Provision of University Teaching and Research: An Empirical Analysis of UK Universities," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 10(1), pages 61-72, Jan.-Marc.
  8. David N. Laband & Bernard F. Lentz, 2003. "New Estimates of Economies of Scale and Scope in Higher Education," Southern Economic Journal, Southern Economic Association, vol. 70(1), pages 172-183, July.
  9. David Greenaway & Michelle Haynes, 2003. "Funding Higher Education in The UK: The Role of Fees and Loans," Economic Journal, Royal Economic Society, vol. 113(485), pages 150-166, February.
  10. Pamela Lenton, 2006. "Where do I go and what should I do? Routes through further education," Working Papers 2006014, The University of Sheffield, Department of Economics, revised Dec 2006.
  11. Aigner, Dennis & Lovell, C. A. Knox & Schmidt, Peter, 1977. "Formulation and estimation of stochastic frontier production function models," Journal of Econometrics, Elsevier, vol. 6(1), pages 21-37, July.
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Cited by:

  1. G. Thomas Sav, 2012. "Stochastic Cost Inefficiency Estimates and Rankings of Public and Private Research and Doctoral Granting Universities," Journal of Knowledge Management, Economics and Information Technology, ScientificPapers.org, vol. 2(3), pages 1-13, June.
  2. 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 066, United Nations University - Maastricht Economic and Social Research Institute on Innovation and Technology (MERIT).
  3. repec:lan:wpaper:4792 is not listed on IDEAS
  4. T Agasisti & G Johnes, 2009. "Cost Structure, Efficiency and Heterogeneity in US Higher Education: An Empirical Analysis," Working Papers 599308, Lancaster University Management School, Economics Department.
  5. G. Sav, 2012. "Stochastic Cost Frontier and Inefficiency Estimates of Public and Private Universities: Does Government Matter?," International Advances in Economic Research, Springer;International Atlantic Economic Society, vol. 18(2), pages 187-198, May.
  6. repec:lan:wpaper:4487 is not listed on IDEAS
  7. repec:kap:iaecre:v:18:y:2012:i:2:p:187-198 is not listed on IDEAS
  8. G. Sav, 2011. "Panel Data Estimates of Public Higher Education Scale and Scope Economies," Atlantic Economic Journal, Springer;International Atlantic Economic Society, vol. 39(2), pages 143-153, June.
  9. Bolli, Thomas & Olivares, Maria & Bonaccorsi, Andrea & Daraio, Cinzia & Aracil, Adela Garcia & Lepori, Benedetto, 2016. "The differential effects of competitive funding on the production frontier and the efficiency of universities," Economics of Education Review, Elsevier, vol. 52(C), pages 91-104.
  10. repec:lan:wpaper:4358 is not listed on IDEAS

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