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Heterogeneity and the evaluation of efficiency: the case of Italian universities

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A random parameters stochastic frontier model is applied to Italian data in order to evaluate the cost function and efficiency of higher education institutions. The method yields useful information about inter-institutional variation in cost structure and technical efficiency. Returns to scale and scope are evaluated for the typical university, and it is found that these returns are almost ubiquitously decreasing, a finding with clear policy implications.
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Document Type: Research Article

Affiliations: 1: Politecnico di Milano, Department of Management, Economics and Industrial Engineering, 20133 Milano, Italy 2: Lancaster University Management School, Lancaster, LA1 4YX, United Kingdom

Publication date: 01 April 2010

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