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This paper proposes a semi parametric smooth coefficient cost model to study the university cost structure where coefficients are an unknown function of the university's overall quality. A local least square method with a kernel weight function is used to estimate the cost function, and a simple statistic for Testing a parametric model of the additive quality versus the semiparametric smooth coefficient model is applied. Empirical results from 56 universities in Taiwan show that, taking quality into account, higher education is subject to diseconomies of scale. In all categories--comprehensive and science/technology and public and private universities--the current university scale in Taiwan is too big to be cost efficient. (JEL I21, H52, 9120), I. INTRODUCTION Institutions of higher education comprise knowledge creation (research) and knowledge dissemination (teaching). Thus, the university's mission is to deliver quality undergraduate and graduate education and to expand the [...]

To link to full-text access for this article, visit this link: http://dx.doi.org/10.1016/j.jeem.2005.01.002 Byline: Yu-Lan Chien (a), Cliff J. Huang (b), Daigee Shaw (c) Keywords: CVM; Double-bounded dichotomous data; Starting point bias; Anchoring effect; Yea-saying bias Abstract: This paper develops a general model that addresses the starting point bias in the dichotomous choice evaluation data by incorporating both the anchoring effect and yea-saying bias. The model is applied to a contingent valuation study that evaluated the health benefits of air quality improvement in three major metropolitan areas in Taiwan. The empirical evidence shows a strong anchoring effect but an insignificant yea-saying bias. The results show a serious understated willingness to pay if the biases in anchoring and yea-saying are not controlled. Author Affiliation: (a) Institute of Natural Resource Management, National Taipei University, Taiwan, ROC (b) Department of Economics, Vanderbilt University, USA (c) Institute of Economics, Academia Sinica, Nankang, Taipei, Taiwan, ROC Article History: Received 7 August 2002 Article Note: (footnote) [star] The authors thank Joseph Herriges and two anonymous referees for their comments and suggestions. The earlier version of this paper was presented at the Kobe Conference on the Theory and Application of Environmental Valuation, held at Kobe University, Japan, January 22-23, 2000. We are grateful to discussants R.T. Carson, W.M. Hanemann, V.K. Smith and participants for useful comments. Research assistance from Ming-Heng Hung and Yi-Ming Lin is acknowledged and appreciated. The usual disclaimer applies.

I. Introduction The financial sector of the Taiwan economy has experienced major structural changes in the past decade. The banking system has been liberalized, a regulated money market has developed, [...]

A model developed to measure university professors' allocation of time between research and teaching, in situations where research production is uncertain, reveals that time devoted to research will decline as the uncertainty or dollar risk of research relative to teaching increases. (RW)