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Multi-product cost functions: An application to the production characteristics of secondary education in Flanders

Published online by Cambridge University Press:  17 August 2016

Mike Smet
Mike Smet*
Affiliation:
Studiecentrum voor Economisch en Sociaal Onderzoek (SESO), University of Antwerp (UFSIA)
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Summary

This study estimates two multi-product cost functions for the entire population of 773 Flemish secondary schools supplying a six-year study program. From the estimated parameters of a quadratic and a generalised translog cost function the degree of ray and product specific (dis)economies of scale as well as the degree of (dis)economies of scope is determined. The paper also describes how marginal costs and cost elasticities can be derived. Three major study fields can be distinguished. Student loads in each of these study fields are used as output variables. Evidence is found for ray economies of scale and global economies of scope. Especially in technical education product specific economies of scale could be realised. Cost savings by supplying two study fields jointly (pairwise scope effects) are also considerable.

Résumé

Résumé

Cette étude estime deux fonctions de coût multi-produits pour la population totale de 773 écoles secondaires flamandes qui offrent un programme d'étude de six ans. On détermine, sur base de paramètres estimés par une fonction de coût quadratique et transloglinéaire le degré de rendements d'échelle spécifiques aux options et au produit, ainsi que le degré d'économies d'échelle. Le papier décrit aussi comment les coûts marginaux et les élasticités-coûts sont déduits. Trois domaines d'études majeurs peuvent être distingués. Les charges d'étudiant dans chacun de ces domaines sont utilisés comme variables-output. On prouve les économies d'échelle des options et les rendements d'échelle globaux. Des économies spécifiques au produit peuvent être réalisées particulièrement dans l'éducation technique. On peut également épargner considérablement des coûts en offrant deux domaines d'étude conjointement (effets de rendement d'échelle par paires).

Keywords

H52I21L31H52121L31
Type
Research Article
Information
Recherches Économiques de Louvain/ Louvain Economic Review , Volume 64 , Issue 4 , 1998 , pp. 407 - 423
Copyright
Copyright © Université catholique de Louvain, Institut de recherches économiques et sociales 1998 

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Footnotes

*

The author thanks Walter Nonneman and two anonymous referees of this journal for their useful comments on earlier drafts of this paper and gratefully acknowledges financial support from the Flemish Department of Education (grant 95.07).

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