Cost-Effectiveness of ODL Institutions

Cost-Effectiveness of ODL Institutions

In general, it is rare to find a case where the efficiency ratio is not more favourable (less than 1.00) for ODL programmes than for conventional education (Hülsmann, 2004, page 25). The fact that it is cheaper per FTE student to provide courses through ODL methods than through traditional face-to-face classes is one of its biggest selling points. In some instances, the cost-effectiveness ratio is also more favourable, but there is no guarantee that ODL will be more cost-effective than conventional provision.

Consider the figures presented in Table 9a below, which summarises data from a number of studies that compared the costs of ODL versus conventional education institutions for three different types of programmes: secondary education, teacher training and higher education.

Table 9a: Efficiency and Cost-Effectiveness Ratios for ODL Institutions

Institutions	Efficiency Ratio	Cost-Effectiveness Ratio	Source and Date
Malawi Correspondence College vs.			Wolf and Futagami, 1992
Day School	0.62	1.60
Boarding School	0.23	0.73
Primary Teacher Orientation Course at AIOU (Pakistan) vs.			Perraton, 2000
PTOC in Conventional University	n/a	0.45-0.70
UK Open University vs.			Wagner, 1977
Conventional University	0.26	0.38-0.45
STOU (Thailand) vs			Lockheed et al., 1991
Conventional University	n/a	0.14

Source: Excerpted from Hülsmann, 2004, Table 10, page 25

For all of the cases listed in the table, delivering educational programmes through the ODL mode was more efficient than through traditional methods. In the case of the Malawi Correspondence College, the average cost for educating an ODL student was only 23% of the expenditure for a student in a local boarding school (equivalent to an efficiency ratio of 0.23).

In most cases as well, ODL proved to be more cost-effective. For example, the average cost per graduate for STOU (the Sukhothai Thammathirat Open University) was only 14% of that for conventional universities in Thailand (equivalent to an efficiency ratio of 0.14). However, this is not always the case. The 1982 study of the Malawi Correspondenc College showed that it cost 60% more (cost-effectiveness ratio of 1.60) to produce a high school ‘graduate’ through ODL than through a conventional secondary school.

The importance of making an accurate calculation of the cost-effectiveness ratio for ODL institutions is illustrated by a case study of the Alternative Secondary Education Programme (ASEP) provided by the Namibian College of Open Learning.

Click on Case Study to read more about this example.