TY - JOUR

T1 - Differences in cost structure and the evaluation of efficiency

T2 - the case of German universities

AU - Johnes, Geraint

AU - Schwarzenberger, Astrid

PY - 2011/12

Y1 - 2011/12

N2 - A multiproduct cost function is estimated for German higher education institutions using a panel of data from recent years. The use of panel data allows a random parameter stochastic frontier model to be estimated, and this delivers new insights on the extent to which differences in costs between institutions producing similar vectors of outputs may be due to different cost structures, on the one hand, and efficiency, on the other. The approach used here therefore resembles in some respects the non‐parametric methods of efficiency evaluation, since different loss functions attach to different universities. We report also on measures of average incremental cost of provision and on returns to scale and scope.

AB - A multiproduct cost function is estimated for German higher education institutions using a panel of data from recent years. The use of panel data allows a random parameter stochastic frontier model to be estimated, and this delivers new insights on the extent to which differences in costs between institutions producing similar vectors of outputs may be due to different cost structures, on the one hand, and efficiency, on the other. The approach used here therefore resembles in some respects the non‐parametric methods of efficiency evaluation, since different loss functions attach to different universities. We report also on measures of average incremental cost of provision and on returns to scale and scope.

KW - stochastic frontier; random parameter models; costs; higher education

U2 - 10.1080/09645291003726442

DO - 10.1080/09645291003726442

M3 - Journal article

VL - 19

SP - 487

EP - 499

JO - Education Economics

JF - Education Economics

SN - 0964-5292

IS - 5

ER -