Efficiency, costs, rankings and heterogeneity:the case of US higher education

Agasisti, Tommaso and Johnes, Geraint (2015) Efficiency, costs, rankings and heterogeneity:the case of US higher education. Studies in Higher Education, 40 (1). pp. 60-82. ISSN 0307-5079

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In this paper, we estimate a variety of models to evaluate costs in US higher education institutions. A particularly innovative feature of our approach involves the estimation of latent class and random parameter stochastic frontier models of a multiproduct cost function: this allows us fully to accommodate both the heterogeneity across institutions and the presence of technical inefficiencies. Such methodological strategy is essential in analyzing the US HE system, which is characterized by a strong internal differentiation. Our main findings are two. First, on public policy grounds, the estimates suggest that global economies could be achieved by effecting a reduction in the number of institutions providing undergraduate instruction, while increasing the number of institutions engaged in postgraduate activity. Second, the current existing rankings turn out as coherent with ratings provided by the calculation of efficiency scores.

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Journal Article
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Studies in Higher Education
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20 May 2013 08:32
Last Modified:
17 Sep 2023 01:23