Obtaining cost weights for research and teaching
Total expenditure data for each university is publicly available from the Department of Education website.10 To calculate expenditure-weighted indexes for teaching output and research output, costs need to be split accordingly. However, neither the Department of Education nor the universities themselves disaggregate these expenditures between teaching and research. In fact, these activities may overlap so closely (most academics are expected to do both) that it might not be meaningful for a university to perform such a disaggregation.
In this analysis, each university’s total operating expenditure was split into teaching and research components. There are three categories of academic staff: teaching only staff, research only staff, and staff with a combined role in teaching and research.11 As there is no data available to split the third category into underlying teaching and research components, we assume the shares of time spent on research and teaching by academic staff from the combined category are 25% and 75%. This is an arbitrary split, designed to provide a conservative estimate of research activity for the combined academic staff group in the absence of further information. These shares are used to weight the research and teaching output for each university. Gathering data on the actual split would be a key enhancement to the experimental index. Sensitivity analysis demonstrating the impact of this assumption is discussed later in the paper.
The average research weights for individual universities obtained via this process ranged from 0.25 to 0.68, with the highest weights for research activity for universities in the Group of Eight.12 The proportions of teaching and research also varied across time, with more volatility across smaller universities which have lower student enrolments and smaller research output.
There are a number of drawbacks with this approach, including:
(a) there is no information on how academics engaged for both teaching and research split their time between these activities. Assuming 25% of this combined category is research may be an underestimate or an overestimate;
(b) using full time equivalent ratios to split expenditure implicitly assumes the same unit labour cost for research and teaching. Ideally, variation in staff levels should be taken into consideration in splitting expenditure between these activities. Academic staff may vary from research assistants to full-time professors. Staff with such widely differing levels of experience would be expected to receive substantially different pay rates, reflecting differences in the amount and quality of their output. Unfortunately, no adjustment can presently be made to account for these differences; and
(c) total operating expenditure for each university was split solely on the basis of labour inputs (i.e. academics) – in other words, the contributions of intermediate and capital inputs towards teaching and research activities were not separately determined.
Notwithstanding these caveats, the cost weights derived above were used to aggregate the teaching output and research output indexes, to construct a volume index for the output of the entire public university sector.
Figure 1 provides an overview of the methods used to derive the aggregate experimental university output index.
Figure 1: Compilation of the experimental university output index
The ‘Group of Eight’ universities are the University of Western Australia, Monash University, the Australian National University, the University of Adelaide, the University of Melbourne, the University of New South Wales, the University of Queensland and the University of Sydney. https://go8.edu.au/