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

Research output: Working paper


Publication date2005
Place of PublicationLancaster University
PublisherThe Department of Economics
<mark>Original language</mark>English

Publication series

NameEconomics Working Paper Series


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.