Costs and Productivity in Higher Education: Theory, Evidence, and Policy Implications

Abstract

Cost issues in higher education have received considerable attention in the literature of higher education over the past three decades. Since the early 1970s, numerous studies (e.g., reviews of the literature on the subject. Studies examining institutional costs to analyze internal efficiency have used various frameworks and methods. These studies have examined a large number of concepts (e.g., unit costs, expenditures by function, the structures of costs, and economies of scale and scope) in order to better understand the use of resources in higher education to produce certain outputs. The majority of the studies have examined instructional costs. Typically, they were interested in the following types of questions: How much does it cost to educate each student? Are there any significant variations in the cost of educating students across institutions or within institutions? How much was spent by function (e.g., instruction, research, administration, outreach services, and various forms of infrastructure support)? Have there been significant changes over time in per student costs or expenditures by function (i.e., trend analyses). Are there economies of scale and scope?Several critical concerns about higher education provided increasing impetus for examining the issues of costs and institutional productivity: Perceived declines in quality, concerns about institutional inefficiency and declining productivity, and concerns about rising costs and affordability have all arisen (see, for example, Clotfelter et aI., McPherson and Winston., 1993; Graham et aI., 1995). Partly as a result of such concerns, public resources allocated to higher 39

Revisiting size effects in higher education research productivity

“…Most studies concern economies of scale in research, attempting to quantify the reduction in average cost of product as level of output expands (Lewis and Dundar 1999). Very few studies have specifically focused on the relationship between research productivity and size of the research unit.…”

Historical Dimensions of the “Cost Disease” in US Higher Education, 1870s–2010s

“…than by the inherent technical requirements of conducting their work” (Bowen 1980: 15). Howard Bowen's work rapidly became “the conventional wisdom” and “classic book on the costs of higher education” for many scholars and leaders of higher education, including some economists (Brinkman 1990: 109; see Clotfelter 1996: 34; Geiger 2004: 59, 278n7; Lasher and Greene 2001: 511; Lewis and Dundar 2001: 137–38; Massy 2003: 39–47, 307; Paulsen 2001: 193; Thelin and Trollinger 2014: 97; Toutkoushian 2001: 13–15; van Vught 2008: 169). But many economists have argued that this theory is circular or tautological or inverts cause and effect.…”

The Effects of Turkey’s Level of Socioeconomic Development on the Open Education System*

“…The demand for higher education is among the problems of higher education in Turkey (Erk, 1989;Korkut, 2001;Lewis & Dundar, 1999;Maxwell, 1987;Şimşek, 1999;Uzun, Özel, & Yalçın, 1990). Anadolu University's ODES clearly takes an important place in meeting this demand.…”