Costs and Efficiency of Higher Education Institutions in England: A DEA Analysis

Journal of the Operational Research Society, (2011) 62, 1282–1297.

Posted: 10 Jan 2015

See all articles by E. Thanassoulis

E. Thanassoulis

Aston University

Mika Kortelainen

Government of the Republic of Finland - VATT Institute for Economic Research; University of Manchester

Geraint Johnes

Lancaster University - Management School; Lancaster University

Jill Johnes

University of Huddersfield

Date Written: 2011

Abstract

As student numbers in higher education in the UK have expanded during recent years, it has become increasingly important to understand its cost structure. This study applies Data Envelopment Analysis (DEA) to higher education institutions in England to assess their cost structure, efficiency and productivity. The paper complements an earlier study that used parametric methods to analyse the same panel data. Interestingly, DEA provides estimates of subject-specific unit costs that are in the same ballpark as those provided by the parametric methods. The paper then extends the previous analysis and finds that further student number increases of the order of 20-27% are feasible through exploiting operating and scale efficiency gains and also adjusting student mix. Finally the paper uses a Malmquist index approach to assess productivity change in the UK higher education. The results reveal that for a majority of institutions productivity has actually decreased during the study period.

Keywords: Higher education, data enevelopment analysis, performance measurement, productivity, cost function

Suggested Citation

Thanassoulis, E. and Kortelainen, Mika and Johnes, Geraint and Johnes, Jill, Costs and Efficiency of Higher Education Institutions in England: A DEA Analysis (2011). Journal of the Operational Research Society, (2011) 62, 1282–1297.. Available at SSRN: https://ssrn.com/abstract=2546767

E. Thanassoulis

Aston University ( email )

Aston Triangle
Birmingham, B4 7ET
United Kingdom

Mika Kortelainen

Government of the Republic of Finland - VATT Institute for Economic Research ( email )

Arkadiankatu 7
P.O Box 1279
Helsinki, FIN-00531
Finland

University of Manchester ( email )

Oxford Road
Manchester, M13 9PL
United Kingdom

Geraint Johnes

Lancaster University - Management School ( email )

Bailrigg
Lancaster, LA1 4YX
United Kingdom
+44 1524 594215 (Phone)
+44 1524 594244 (Fax)

Lancaster University ( email )

Lancaster LA1 4YX
United Kingdom

Jill Johnes (Contact Author)

University of Huddersfield ( email )

Queensgate
Huddersfield HD1 3DH
United Kingdom

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