1 Strictly speaking, there is no single word that translates into English the full meaning of the Chinese word. It means a combination of "professional", "employee", "trainee", "student", "learner" or "graduate". In this context, professional' is used to include the meanings of all the above words.
Keywords: Open and distance learning, RTVUs, education economics, scale economy, teaching venues, off-campus teaching centers
Introduction
One important economic characteristic of modern distance education is that by expanding the number of enrolled students, the relatively high fixed costs of distance education can be shared, thus achieving the distance education institution's goal of reducing variable cost and offering high quality, low price education services.
Starting in 1998, China implemented the "National Modern Distance Education Engineering" plan, and thereafter the Ministry of Education (MoE) launched a pilot programme of "CCRTVU Professional-fostering Mode Reform and Open Education: (1999-2007)". "Open Learning" has been thriving, and the record-breaking increase in cumulative student enrollment and value of fixed assets has propelled RTVUs to an unprecedented level of development. As one of the largest distance higher education institutions in the world, the RTVU system is also facing new challenges: What is the average variable cost per student in the new era? What is the relationship between the average variable cost per student and the number of students? Are there upper and lower limits for school operating scale? How to strike a balance among quality, scale and effectiveness? These are realistic issues confronting ODL in China and other populous developing countries, and need to be explored.
The most significant characteristic of ODL implementation is its systematic organization. The RTVU system is composed of 1 China Central Radio & TV University (CCRTVU), 44 provincial radio and TV universities (PRTVUs), 956 prefecture and city level RTVUs, and 1,875 study centers at the county and city level. Approximately 86,100 full time staff and 36,100 part time staff work for this multi-layered RTVUs system.[1] Each level plays different roles and undertakes different tasks in educating students in the ODL system. Because RTVUs at the local level are under the administration of local governments and have been established separately or jointly, they usually adopt independent cost procedures and have their own accounting systems.
Based on the topic "Empirical and Comparative Study of Cost Efficiency in RTVUs", this study conducted a direct survey on distance education cost data over the past consecutive 4 years at 21 RTVUs at the prefecture and city level from 3 provinces in China's western, central and eastern regions. The study reviews the scale effectiveness of ODL in RTVUs at the prefecture and city level by examining aspects such as average cost per student, average variable cost per student, scale economy and optimal enrollment scale.
Literature Review
The earliest classic study on the scale economy of distance education shall be traced back to Wagner's research findings (Wagner，1972，1973，1977)[2] in the 1970's. In 1972, Wagner made a cost comparison between the budget data of the Open University (OU) in 1973 and the actual cost data of conventional higher education institutions in the U.K. in 1969. Wagner's research concluded that the equivalent student cost for open education is about 1/4 of the average cost of a conventional student. If each on-the-job OU student is calculated as 50% of a full-time student at a conventional university, and consideration is made for the research done in conventional universities, the adjusted OU student average cost is about 69.1% of that of a conventional university student. Although Wagner himself prefers using the rate of 1/4 to explain the cost-effectiveness of open universities, another distance learning expert Greville Rumble (Rumble, 1997)[3] believes that the result of 69.1% is closer to the fact. Wagner's research findings in 1977 further reveal that with the increasing number of OU students, OU obtained economic benefit from the scale expansion, i.e. scale economy. Greville Rumble's research (Rumble，1976)[4] shows that the OU full-time equivalent student average cost is 41% of that of conventional university students. Since then, more data and evidence for the comparison of average student cost between students from distance education institutions and conventional universities have been collected in different countries. An international study in 1991 shows that the ratio of the average student cost between independent distance education institutions and conventional universities in Pakistan, China (China Radio and TV Universities) and Korea is 0.22, 0.50 and 0.10 respectively. Moreover, a study conducted in India in 1993 indicates that the ratio of the average student cost between independent distance education institutions and conventional universities is between 0.08-0.41.[5]
Domestic research on distance learning scale economy started in the 1990's. Notable research findings are as follows: Xing Yi (1988)[6] calculated that the break-even point for satellite-based TV education was 41,000 learners watching programmes at the same time. Ding Xingfu (1990)[7], based on research on the investment effectiveness of China RTVUs, points out that there should be an upper limit for quality control and a lower limit for cost-effectiveness. Wu Gengsheng and Li Haixia's (2004)[8] case study of Tsinghua University's web-based college finds that the cost of online education is much lower than that of conventional education. Zheng Qinhua and Chen Li's (2004)[9] analysis of the operational costs of a university's online courses reveals that the cost break-even point is 388 students. Yang Tingting and Yin Shuangxu's (2007)[10] research on the cost-effectiveness of RTVU multi-media instruction material development shows that the break-even point for various media instruction materials ranges from 1600 to 10000 students; student number for the break-even point for courses is 5632 students with a cycle of 3 years; the break-even point for undergraduate programmes is 5989 students with a cycle of 5 years. The above aforementioned studies have explored the cost-effectiveness problem of distance learning in China from different angles, and have made significant contributions to latter researchers. However, cost and revenue analysis at the accounting level and descriptive statistics for these case studies is not sufficient; it is critical that we perform deeper analysis at an economic theory level—build econometric regression models, make statistical inferences, and offer threshold values for reference. This analysis for ODL is especially crucial in the new era of web-based RTVUs leading the development of distance education in China. Therefore, using economic models and methods on RTVU data and providing new evidence for the distance education scale-economy of RTVUs in the new century are of great theoretical and practical significance for understanding the cost-effectiveness of distance education in China.
To do research on the cost-effectiveness of distance learning, the general prior assumption is that the teaching effectiveness of distance and conventional education is the same, and such an assumption has been adopted by this paper for research purposes.