Page 4 of 5
Conclusion and Discussion
This article has analyzed the scale economy for ODL in RTVU teaching venues at the prefecture and city level in the aspects of average cost per student, average variable cost per student, scale economy and optimal scale of student number, etc. considering the economic development gap between different parts of China. The major results of the analysis are as follows:
- With the increase in number of enrolled students, the average cost per student for RTVUs at the prefecture and city level declined; consequently, there is a scale economy existing in teaching venues in RTVUs at the prefecture and city level. The number of enrolled students in Fujian is higher than in Hunan, and Xinjiang has the lowest number. For average cost per student, RTVUs at the prefecture and city level in Fujian were the lowest, while the average cost per student in Hunan and Xinjiang are close to each other.
- There is still a large gap between the average variable cost per student and the average cost per student for RTVUs at the prefecture and city level, meaning that there is still room for cost reduction in the operation of such RTVUs. The average variable cost per student varies according to regional economic development level. The basic trend is that average variable cost per student in the east is lower than in the central part, and the central part is lower than the western part.
- When other conditions have been controlled, the average cost per student in ODL demonstrates a scale economy feature. Nationwide, the optimal scale in enrolled students is around 7800. From the provincial sample analysis, the optimal scale in enrolled students in RTVUs at the prefecture and city level is Fujian 9100, Hunan 3800, and Xinjiang 2200. Compared with the current average scale in enrolled students, there is considerable room for expansion for RTVUs at the prefecture and city level in the east with favorable development conditions. RTVUs in the central and western regions also have potential for expansion, but to a lesser degree than the east.
From a regional analysis standpoint, the findings of the empirical study also reflect imbalances in the development of RTVUs at the prefecture and city level due to differing geographical location and economic development levels.
There are some other findings of the empirical study. The rise in ratio of student to teacher will result in a fall in average cost per student. Generally speaking, the student-teacher ratio is an important variable reflecting teaching and service quality. Consequently, when the scale expansion of ODL contributes to a fall in average cost per student, the impact on teaching quality input factors should not be neglected. Thus, as we examine scale economy in teaching venues, we must further examine how to balance the relationship among scale, quality and effectiveness.
First of all, the expansion of quality teaching resources is the precondition for realizing scale economy. The fall in average cost per student depends on the increased number of students collectively sharing the school's fixed costs. Thus, the expansion of student scale makes it possible for us to reap the benefit of scale economy. However, the preconditions of realizing this benefit are the control of marginal cost[12] and the further improvement in teaching resources. The definition of marginal cost is the change in total cost that arises when the quantity produced changes by one unit; the result is a marginal increment from total output. In this context, the marginal cost for a newly recruited student is the extra expenditure caused by the new student. It is hoped that scale and effectiveness can increase at the same rate. In reality, there are three possible relationships among scale, average cost and marginal cost – more economical, less economical, or no change. The main factors deciding this relationship are the ratio between fixed cost and variable cost, and optimal use of educational resources. When allocating fixed costs in ODL planning, there is a logical starting point[13] in theory: ODL is planned with the separation between teachers and students in mind. The physical distance between teachers and students needs to be bridged via teaching media, and students are assumed to have autonomous learning skills. As a result, the development of quality educational resources is the precondition and basis for implementing distance education. There is no direct relationship between the preliminary investment in resource development and number of students; the cost can be shared only by future expansion in scale. In other words, if we hope to continuously reap the benefit of scale economy, improving the quality of teaching media resources is essential.
Secondly, analysis of the impact of student-teacher ratio on scale and effectiveness must take into account local conditions and strategic plans of the teaching venue. The student-teacher ratio is an indicator reflecting both effectiveness and quality. The ratio is closely related to teaching model,[14] and has significant impact on average cost per student. The survey shows that over the past few years, some teaching venues had approximately 10,000 enrolled students with a high student-teacher ratio and a low average cost per student. It seems that these RTVUs fully reaped the benefit of scale economy, improved their financial position, and are able to make strategic investment plans. However, how should investments be directed so as to maintain the balance of quality, cost and effectiveness? For RTVUs, investments that sustain and strengthen scale economy should be the first choice. Investing in renewable educational resources is also important, such as investing in developing excellent course resources, student question databases, and technological platforms, etc, which not only benefit distance learners but also minimize marginal cost caused by new students. A RTVU may decide to invest accumulated funds in physical campus construction to provide direct on-campus services and boost the university's image. Although such investment is necessary and understandable, the key is to invest to the proper degree. Utilization efficiency of costs should be taken into full consideration,[15] control of average cost per student should be reviewed, and the role of the university should be further clarified – whether to maintain a low-cost scale economy operating mode or whether to pursue a high-cost service-oriented operating mode with investments in facilities and high student-teacher ratio. These are challenges that all RTVUs must face.
Thirdly, investments in ODL quality assurance should be increased alongside the pursuit of scale economy. The study found that the level of investment in educational quality has a significant impact on average cost per student, that is, a drop in average cost per student may be at the expense of lowering education quality. This is a warning that although we have chosen the multimedia-based ODL mode and reap the benefit of scale economy, increase in scale must not decrease the quality of service in the educational process, and new service demands may arise. Theoretically, the scale economy of ODL is brought about by its self-sufficient distance learning mode which emphasizes self-study. This study mode is based on well-designed and well-produced learning packages. Interaction between teacher and learner is integrated into teaching materials, and dialogue between teachers and students is replaced by interaction between human and computers, which reduces teaching operating costs. In reality, teaching issues cannot be fully resolved with preliminary planning alone. It is said of learning that "He who does not advance loses ground". It requires personal effort as well as effort from the university to care for, encourage, review, examine, and motivate students at appropriate times throughout the learning process. There will be a diversified demand for service with the expansion of scale, and this will entail necessary management costs and service costs which cannot be reduced. If we do not pay attention to process management and teaching services, and leave students to study completely by themselves with little direction in the learning process, we cannot fully assure teaching quality. Ultimately, we must strive to maintain a dynamic balance among distance education quality, scale and effectiveness.
Finally, there are two issues that should be noted when reviewing the research findings of this article. (1) When doing research on the effectiveness of distance education, it is customary for researchers to assume that conventional education and ODL have the same education quality or education effect, and then proceed with a discussion on ODL effectiveness. However, this hypothesis is very weak in reality. Carnoy and Levin (Carnoy and Levin 1975)[16] note that "a small loss of educational output must be deducted from the cost saving advantages of the open university." They point out that conventional university students, compared with open university students, receive many valuable services such as interaction with classmates, library services, campus lectures, etc. (2) Compared with conventional education, ODL has a relatively higher drop-out rate, called the dormancy rate, which is an unarguable fact for ODL. The high drop-out rate or dormancy rate, to some extent, has increased the average cost per student in ODL institutions. The average cost per student calculated from the selected data in this research paper has not been adjusted for drop-out rate or dormancy rate. The two issues mentioned above may be areas for further research.
2 The ratio of registered students to students with academic records was not available for the years in question. It is possible that they continued their study later because ODL in RTVUs are valid for 8 years.