Higher Education Institutions’ Costs and Efficiency: Taking the Decomposition a Further Step

Posted: 10 Jan 2015

See all articles by Geraint Johnes

Geraint Johnes

Lancaster University - Management School; Lancaster University

Jill Johnes

University of Huddersfield

Date Written: 2009

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.

Keywords: Stochastic frontier, Random parameters model, Costs, Higher education

JEL Classification: C14, C23, C51, D20, I20

Suggested Citation

Johnes, Geraint and Johnes, Jill, Higher Education Institutions’ Costs and Efficiency: Taking the Decomposition a Further Step (2009). Economics of Education Review, Vol. 28, No. 1, 2009. Available at SSRN: https://ssrn.com/abstract=2546787

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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