| In the first of the three papers, we estimate a quadratic multiproduct cost function for U.S. higher education. We find that private and public IHEs have different cost functions; that private IHEs have a consistent cost function, robust to different versions of the regression; that the estimated cost functions of public IHEs change wildly on minor respecifications of the model. In private IHEs we find that economies of scope are present throughout. Also, there are economies of scale up to a point that is above the average size of an average private IHE. In private IHEs the marginal cost of educating undergraduates is decreasing in the number of undergraduates while the cost of educating graduate students is increasing. The value of the private IHE's endowment is positively correlated with its costs.; In the second paper, we use a simple model, based on the assumption that in industries like education there are "dedicated" entrepreneurs and on differential tax incentives, to seek answers to the following questions: What are the social effects of the fact that the non-profit status (tax breaks and other requirements) is available? What determines the market share of non-profits? We consider different structures of tax-exemption for non-profit organizations, find conditions for tax-exemption working as a screening device, and explain why little enforcement concerning their status seems to be necessary. We do comparative statics analysis and consider the effects of the non-profit-for-profit mechanism on social welfare.; In the last, policy-oriented paper, co-authored by Peter Mazsa, we analyze the reasons for inefficiency in Hungarian higher education, also presenting a formal, albeit just illustrative model. We claim that most of the inefficiency could follow from the less than perfect incentive structure of college decision makers which is inevitable under the present state-controlled system. Finally, we sketch a proposal that suggests that the government should refrain from the role of the owner of state colleges and privatize them on completing a number of measures, including committing itself to channel all higher education support through vouchers. |
