Costs, efficiency, and economies of scale and scope in the English higher education sector

Geraint Johnes, Jill Johnes

Research output: Contribution to journalArticlepeer-review

29 Citations (Scopus)


An understanding of the production and cost technology of higher education institutions is of considerable policy interest as it motivates the structure of the sector-how large universities should be, and what mix of outputs they should produce. We review the literature and, using data for English institutions in 2013-14, apply appropriate frontier methods to model the structure of costs in this diverse sector. In doing so, we uncover information about the returns to scale and scope within the higher education sector: in particular, the class of institutions comprising larger research-intensive universities and small specialist institutions could benefit from further concentrating postgraduate and research activity. We find that the universities comprising the English higher education sector are largely efficient (measured relative to observed practices) and that there is little scope for gains in technical efficiency from allocating resources on the basis of efficiency scores.

Original languageEnglish
Article numbergrw023
Pages (from-to)596-614
Number of pages19
JournalOxford Review of Economic Policy
Issue number4
Publication statusPublished - 13 Oct 2016


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