Parliamentary Inquiry on University Funding


Parliamentary Inquiry on University Funding

29 June 2018

Key Takeaways:

  1. Efficiency in Research: Efficiency, in the context of research in Australian universities, refers to achieving the same level of output with fewer resources or obtaining a higher level of output with the same resources.
  2. Understanding Expenditure Context: To measure the efficiency of research funding, it is crucial to acknowledge that universities have two main outputs: research and education. Estimating the efficiency of both research and education is essential to evaluate overall research expenditure efficiency accurately.
  3. Measuring Efficiency and Productivity Growth: Graphical representations demonstrate an efficiency “frontier” that considers both education and research outcomes. The cost of research and research production is plotted to analyze efficiency across Australian public universities.
  4. Exchange Rate between Education and Research Costs: On average, the cost of educating 14 students equals the cost of funding one research publication in the Australian university system in 2016.
  5. Ongoing Research Topics: Various research topics are currently being investigated, including economies and dis-economies of scale in research and education establishments, the impact of multiple sourced research funding on efficiency, the relationship between university efficiency and executive remuneration, and more.

There is growing anticipation that the federal government’s response to the Universities Accord review’s final report will come soon. Given this and the fact that the budget is less than a month away, it is timely to review one of the final report’s key insights.

Recently released analysis finds that one large Group of Eight university outperformed other public universities in its research and education productivity outcomes during the pandemic.

The joint and common cost problem arises where there are two or more outputs that arise from costs that are shared in the production of these outputs. In many situations, the ability to assign costs to these two or more outputs is not complex. But there are instances where it is highly complex. In these situations, there is a need to use advanced analytics to provide a valid and reliable estimate of costs.

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