Universities as Multi-Product Firms

Abstract

Most of our attention hitherto has been devoted to the teaching function of educational institutions. This is natural enough, since most of the education system is devoted primarily to the dissemination of knowledge, understanding and skills. In this chapter we consider the special case of the universities: institutions of tertiary education where the dissemination of knowledge occurs side by side with the creation of knowledge. At the tertiary level, the expertise of staff is typically concentrated in very narrow areas. In general this precludes the possibility of allowing staff to double up as teachers of, say, history and religious studies. Indeed, it is usual for the focus of interest of an academic to be much narrower than her discipline: for example, a member of an economics department may consider herself to be a labour economist, or a development economist, or an econometrician. While primary and secondary schools produce educated individuals, only in the case of the tertiary sector is that education so narrowly focused as to enable distinct teaching outputs — graduates of economics, physics, history, and so on — to be separately identified. Yet universities in general provide a wide curriculum.