In this chapter, we have described how measuring productivity in higher education is especially challenging relative to the simple textbook model. Joint production of multiple outputs, heterogeneous inputs and outputs, quality change over time, and quality variation across institutions and systems all conspire to add complexity to the task. In order to advance productivity measurement beyond its current nascent state, it is necessary to recognize that not all of the complexities we have catalogued can be adequately accounted for at least at the present time. The panel recognizes the difficulties of moving from the conceptual level of analysis (Chapters 1-3), which is surely the place to start, to empirical measurement recommendations. Like other economic measures in their incipient stages—such as GDP estimates and the national economic accounts on which they rest (particularly early on in their development)—new measures of higher education productivity will be flawed.
Because the performance of the sector cannot be fully organized and summarized in a single measure, it becomes all the more important to bear the complexities in mind and to monitor supporting information, especially regarding the quality of output (e.g., student outcomes). Without this awareness, measures will surely be misused and improper incentives established. For example, the danger of incentivizing a “diploma mill,” pointed out earlier, is real. Measuring performance is a precursor to developing reward structures that, in turn, incentivize particular behavior.
Here, we can only reiterate that the productivity measure proposed in Chapter 4—or any single performance metric for that matter—if used in isolation, will be insufficient for most purposes, particularly those linked to accountability demands. For the most part, a productivity measure will not be of great use for improving performance at the institutional level. What is relevant is the question of whether being able to measure higher education productivity in the aggregate will produce a better policy environment, which may in turn lead to indirect productivity improvements over time.