Economies of scale and scope at public master's institutions: Evidence accounting for spatial interdependency

Abstract

ABSTRACTThis study examines costs of public master's colleges and universities in the United States by employing panel data on 248 institutions spanning fiscal years 2004–2012. Our analyses estimates a flexible fixed cost quadratic function that also accounts for spatial interdependency to empirically investigate the economies of scale and scope with regards to undergraduate enrollment, graduate enrollment, and research at public master's institutions. Economies of scale exist for undergraduate and graduate education at mean, below and above it, but not for research. Ray economies of scale are present around and below mean. Economies of scope both at the individual and global level are found at current mean, below, and above output levels.