Input and output substitution in higher education

Abstract This study estimates a multi-input multi-output model of production in higher education based on data from academic departments from a large public university. The results show that there are economies of scale in all dimensions – undergraduate and graduate instruction, and research – of the university's output over the observed range. All three types of labor – tenured faculty, non-tenured faculty and graduate assistants – are substitutes, with the demand for the most skilled category, tenured faculty, being least elastic.