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William F. Massy and Sandra Archer

Considerable progress has been made on higher education productivity measurement during the last few years. This chapter reviews the development of two kinds of indices: a ‘macro’ index that uses aggregate data to calculate a multifactor productivity index for the university as a whole, and a ‘micro’ productivity metric that uses course-level activity-based costing data which in turn can be aggregated to the level of the whole university. The macro index was developed by an expert panel of the (US) National Research Council; this chapter reports its application to data for substantially all two- and four-year colleges and universities in the United States. The micro measure is based on the ‘Enhanced ABC’ model currently being applied to data on individual courses at universities in Australia and to some extent in the United States. The chapter concludes with suggestions for further research on both types of metric, and proposes a long-term solution that would bring the two together to provide a comprehensive view of college and university productivity.