The Economics and Management of Small Post-secondary Distance Education Systems

After reviewing previous work on the economics of distance education, which has been based on the large scale operation of the U.K. Open University, the economics of smaller systems are analyzed. It is shown that models used in conventional education are unhelpful and a new cost model based on the functions of course development and services delivery is described. This model is then employed, using data from Athabasca University, to explore the importance of factors such as course life and institutional costs. It is then used to examine the economic impact of policy alternatives such as changes in ratio of student numbers to credits offered and in the mix of programming of the institution. The second part of the paper argues the thesis that small distance education systems require tighter management than conventional institutions. It examines the four main activities of management: planning, organizing, leading and evaluating in order to highlight areas of administration requiring special attention.