Comprehensive cost analysis of the University of the Air of Japan

The University of the Air of Japan (UAJ) was established to provide all people access to university level education. The purpose of this paper is to evaluate from several different perspectives the cost-effectiveness of UAJ and its nationwide expansion.Even when considering only direct cost, the per student cost of UAJ is lower than that of any conventional campus-based university program. When indirect cost such as opportunity cost and study expenses are also considered, the economic advantage of UAJ is especially apparent. Much of UAJ's economic advantage is the result of the very low opportunity cost to UAJ students.The economic advantage of UAJ as indicated by cost per graduate and cost per credit is smaller than that indicated by cost per student. When both direct and indirect cost are considered, the cost per credit of UAJ is 0.51 and 0.53 of that at national and public universities; 0.65, 0.86 and 2.8 of that of day programs, evening programs and correspondence programs respectively at private universities.Simulations of a nationwide expansion demonstrate that UAJ will be more economical if a satellite broadcasting system is used. Although it will require high initial and fixed costs, the cost per credit will decrease with an increase in the number of students. The most economical method of expansion may be to send video tapes to study centers and students until the number of students reaches economical levels, and to increase cooperation with conventional universities in the cooperative use of classrooms for study centers and credit transfer.