The Achievement of Scale Efficiency in UK Universities: A Multiple-input Multiple-output Analysis

Abstract

This study is an empirical investigation of the cost efficiency of UK universities based on a flexible multi-product cost function model. Emphasis in the study is on the identification of optimal overall scale in UK universities and scale efficiency with respect to the individual outputs of teaching and research. The study directly employs the research ratings generated by the 1992 research assessment exercise to take explicit account of research quality. In addition, emphasis is placed on comparing the results obtained to those obtained by Glass et al (1995). This latter study was based on earlier UK university data and utilized the research ratings generated by the 1989 research assessment exercise. The key findings are: that UK universities are on average characterized by increasing returns to scale; that returns to scale in research are decreasing for the top and middle university groups and constant for the bottom group; and that on average increasing returns hold for undergraduate teaching provision.

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