Assessment of Competition Level in the Market of Russian Universities Using a Modified Panzar-Rosse Model

Abstract

The paper reviews some of the governmental policy measures aimed at strengthening of competition in the market of Russian universities, as well as the best international practices in this area. We have analyzed competitive behavior of universities under the current governmental policy in higher education, research and technology. The article suggests an approach towards assessing efficiency of governmental stimulation of competition among universities and towards forecasting outcomes of applying the existing stimulation tools. The paper provides the results of assessing the current situation with competition in the market of Russian universities using a non-structural method, namely an adjusted Panzar-Rosse competition assessment model. As one of the model factors, we used the cost of grants gained by universities as a part of governmental orders. We also analyzed the effects of other factors describing the size, entrance requirements, and research activity of universities. The article discovers how university income depends on the cost of grants received (a ratio of total income to the size of grants) and on the number of students and teachers. The level of competition in the reviewed market is outlined through elasticity of the total income of an average university based on the cost of grants received.