Estimating quality-adjusted productivity in tertiary education
This paper constructs quality adjusted productivity indices for the tertiary education sector. It proposes a number of methods for making quality adjustments to measures of labour and multifactor productivity and applies those to the public tertiary sector in New Zealand over 2000-15.
Quality-adjusted productivity measures for teaching across the tertiary sector as a whole are produced as well as measures of research productivity for universities. Our evidence suggests that quality adjustment, to both inputs and outputs, can make substantial differences to conclusions about productivity trends over 2000-15.
In the case of tertiary teaching productivity, adjusting student numbers for the completion of qualifications suggests positive, rather than zero, productivity growth in the sector, largely driven by an expansion in nonuniversity providers. In the case of research productivity (universities only) weighting research output for citations amplifies measures of productivity growth following the introduction of the Performance Based Research Funding (PBRF) regime. Especially important, but rarely discussed, components of those adjustment are (i) methods of deflating financial variables within some tertiary productivity measures; and (ii) how universities allocate resources between teaching and research.