Panel Data Estimates of Public Higher Education Scale and Scope Economies

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This paper uses panel data spanning the 2000–2001 to 2006–2007 academic years for U.S. public colleges and universities to estimate multi-product cost functions and the economies of scale and scope associated with teaching and research. The empirical results indicate statistically strong institutional effects. That suggests previous cross-sectional studies anchored in 1995–1996 and earlier data have generated potentially biased estimates. Here, estimates are 2006–2007 updates provided separately for doctoral, master, bachelor, and associate level colleges and universities. Controlling for institutional specific effects, the results bring into question some of the previous findings of widespread teaching and research economies of scale and scope. However, there is also evidence of some common ground of empirical support.



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