Using Data Envelopment Analysis to Improve Estimates of Higher Education Institution's Per-Student Education Costs

Overview & Synopsis

This paper puts forth a data envelopment analysis (DEA) approach to estimating higher education institutions' per-student education costs (PSCs) in an effort to redress a number of methodological problems endemic to such estimations, particularly the allocation of shared expenditures between education and other institutional activities. An example is given using data for a sample of higher education institutions in The Netherlands and the results are compared with PSC estimates generated by a more traditional approach. Although several methodological concerns still persist, the use of DEA is argued to increase the likelihood of producing more realistic cost estimates for individual institutions. (Contains 13 notes and 2 tables.)