The Efficiency Of The Supply Of Higher Education Product Mix

Over the last half century, with the social and economic development, the demand for skilled labors are constantly increase. In addition, driven by the theory of Human Capital and the notions of "equalization of educational opportunity" and "massification of higher education", the scale of university sector began to expand almost in every country. Currently, productivity and efficiency are two higher education topics receiving considerable attention in policy circles and within academe. As enrollments in higher education continue to expand, public funding is becoming increasingly scarce, particularly as competition increases from other recipients of public funds, such as social insurance, healthcare and so on. On the one hand, the funding of higher education is always in a state of shortage; on the other hand, the needs for higher educational expenditure are always in the ever expanding. As a result, the funding of higher education will inevitably fall into such a long-term contradiction between supply and demand.When public education did face a double crisis of trust and financial, people began to realize the limitations of the government role, which raised a renewed concern on the role of the market. Of course, both the government and market are not perfect. As thus, how to define the role of both government and market in supplying higher education goods, as well as the efficiency score of such mixed supply model will obtained are the two main issues receiving more attention in policy circles and within academe. In the case of governmental supply of public goods, both Lindahl and Samuelson had prove the Pareto efficiency. However, on determining the optimal supply allowance of educational goods both by government and market, whether the partial equilibrium or the general equilibrium had stringent assumptions. These hypothetical conditions could not be fully met in the real world, therefore, in the process of supplying higher education goods, the existence of efficiency loss is inevitable. Secondly, Coase Theorem could be regarded as the theoretical basis for the market supplying of higher education goods, however, the efficient solution of Coase Theorem is uncertain, neither is the market supply result. More importantly, the higher education goods supplied by the market simply can not achieve the goal of educational equity. Compared with supplying either by government or by market, the mixed supply of higher education goods both by government and market is not only a corrective mode for the failure of both, but also a realistic option for improving the efficiency of supply higher education goods. In view of above, the author employed the concept of relative efficiency to assess the efficiencies of 68 universities directly under the Ministry of Education (MOE). On the one hand, these universities belong to public sector; on the other hand, these higher education goods are provided both by students (or there families) and the government, which can be treated as the mixed mode of supplying both by government and market.Undoubtedly, the productivity of higher eduction sector has significantly improved in recent years, however, wether the change of productivity growth was driven by the external governmental policies or the result of optimization resource allocation within universities, which should be figured it out. In a world without inefficiency, productivity growth is synonymous with technical progress. However, in a world in which inefficiency exists, productivity can no longer be interpreted as technical change unless there is either no technical inefficiency or unless technical inefficiency does not change over time. If these conditions do not hold, then productivity is redefined as the net effect of changes (or movements relative to the existing frontier) and shifts in the production frontier (or technical change). This distinction is important from a policy viewpoint, because of changes in productivity growth due to inefficiency suggest different policies to those concerning about technical change. In any case, hardly little is known about the productivity of the Chinese university sector, even less about the productivity levels across the sector, we can not determine whether productivity improvements are the result of an increase in efficiency, an increase in technology, or both. Based on these issues above, this paper attempts to evaluate the supply efficiency by "mixed supply mechanism", as well as to analyse technical efficiency change or technological change which causes the change of productivity growth.The paper is divided into seven main sections.Section one is an introduction. After discussing the research background, theory and practice, this section reviews the relative literatures on the mixed supplying of higher education goods, and then talks about research ideas, methods and innovations.Section two focuses on the theories of provision efficiency of educational goods, including theory of mixed goods, positive externality, internalization of externalities and cost sharing.Section three goes into the details about the mixed supply of higher education goods. Section four discusses the mixed provide and mixed produce of higher education goods, respectively.Section five deals with the efficiency of higher education sector.Section six employs Malmquist indices to estimate technical efficiency and technological change of 68 universities, and then presents the result.The last section ends with some concluding remarks.