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Funding and Focus: Resource Dependence in Public Higher Education

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Abstract

Utilizing resource dependence theory, this study investigates the relationship between institutional reliance on net tuition dollars as a source of revenue and institutional expenditures for education and related activities at public, four-year institutions of higher education in the United States. Drawing on an 11-year panel of university-level data and utilizing an instrumental variables approach which acknowledges the potential endogeneity of institutional revenue structure, I find that institutional expenditures are quite responsive to changes in revenue patterns. This is a finding that is discussed within the context of the longstanding trend of decreased state support for public higher education, as well as the increasing popularity of market-oriented approaches to the management of public higher education systems observed in the United States and abroad.

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Notes

  1. FTE enrollment measures within IPEDS are only available for years after 1998. For 1998, FTE was manually calculated from fall student headcounts using the formula provided by IPEDS.

  2. An issue with the Delta Cost data (and the underlying IPEDS data from which it is drawn) is the fact that some “child” institutions rely upon a “parent” institution to report aggregated financial data while other types of data may be reported by individual campuses directly, thus introducing inconsistency in reporting over time. To address this concern, I ran models excluding all institutions that ever reported as a child or parent with another institution. Omitting these institutions yields no substantive changes in the results. These results are available from the author upon request.

  3. I also estimated alternative models employing Newey-West standard errors, which are robust to arbitrary heteroskedasticity as well as autocorrelation. The results are substantively identical to those presented and are available from the author upon request.

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  1. School of Public Affairs and Administration, University of Kansas, 1445 Jayhawk Boulevard, 4060 Wescoe Hall, Lawrence, KS, 66045, USA

    Jacob Fowles

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Fowles, J. Funding and Focus: Resource Dependence in Public Higher Education. Res High Educ 55, 272–287 (2014). https://doi.org/10.1007/s11162-013-9311-x

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