education economics, education finance


This paper analyses the political economy of public higher education funding in the United States and offers a unique conceptual and empirical approach to describe the determinants of funding sources. By evaluating the tuition proportion of revenue, this analysis estimates the determinants of the relative distribution of the funding burden between public and private sources. The empirical results show inelastic substitution between government appropriations and tuition revenue, significant demand effects on tuition revenue, and that institutional differences contribute to varying dependence on tuition as a source of revenue. The estimated determinants identify several areas where state and university policies may directly affect the relative burden of higher education costs.

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