Departmental Productivity in American Universities: Economies of Scale and Scope

Abstract The study reported in this paper examines the departmental production and cost structures of a homogeneous sample of American public research universities in order to estimate their degrees of economies of scale and scope. Multiproduct cost functions are estimated for the departmental production of teaching and research in order to determine the most efficient level and product-mix for differing types of departments. Three clusters of departmental fields (i.e., the social, physical, and engineering sciences) are examined across 18 similar public research universities through the use of a four-output (i.e., undergraduate teaching, master level training, doctorate level instruction, and research productivity) quadratic cost function. At the department level, both ray- and product-specific economies of scale and global and product-specific economies of scope are estimated at differing levels for all outputs.

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