Economies of Scale in Iran's Higher Education: A case Study of Non-Medical Public Universities

Economies of scale have been well exploited in higher education in developed countries. Universities will have the lowest average cost by operating at the optimal level while enjoying economies of scale. Considering the decrease in the allocation of financial credits of the Iranian government to universities in Iran, it is vital for Iranian universities to operate at an optimal level. Considering the above points, in this article, an attempt is made to evaluate the extent to which non-medical public universities in Iran enjoy economies of scale. For this purpose, the data of 83 non-medical public universities for the period 1394-1395 HS were used to estimate the “product-specific” and multiproduct scale economies in Iran's higher education industry. Ray average cost was used to estimate multiproduct scale economies. In this study, faculty members, non-academic staff, and physical capital were considered as inputs, and undergraduate, master's, doctoral students and research income of universities were considered as outputs. The findings of the study indicate the existence of "product-specific economies of scale" for bachelor's and doctorate degrees. Economies of scale were not confirmed for Iran’s universities research activities. Also, the results indicate the existence of multiproduct scale economies in Iran's higher education.