IDEAS home Printed from https://ideas.repec.org/a/gam/jsusta/v13y2021i7p3903-d528126.html
   My bibliography  Save this article

COVID-19 and Financial Sustainability of Academic Institutions

Author

Listed:
  • Oleg V. Pavlov

    (Department of Social Science and Policy Studies, Worcester Polytechnic Institute, Worcester, MA 01609, USA)

  • Evangelos Katsamakas

    (Gabelli School of Business, Fordham University, New York, NY 10023, USA)

Abstract

The COVID-19 pandemic has had a significant impact on higher education. Steering academic institutions through the pandemic is a complex and multifaceted task that can be supported with model-based scenario analysis. This article studies the short-term and long-term effects of the pandemic on the financial health of a college using scenario analysis and stress testing with a system dynamics model of a representative tuition-dependent college. We find that different combinations of the pandemic mitigation protocols have varying effects on the financial sustainability of an academic institution. By simulating six individual components of the COVID-19 shock, we learn that due to the causal complexity, nonlinear responses and delays in the system, the negative shocks can propagate widely through the college, sometimes with considerable delays and disproportionate effects. Scenario analysis shows that some pandemic mitigation choices may destabilize even financially healthy institutions. The article concludes that higher education needs new sustainable business models.

Suggested Citation

  • Oleg V. Pavlov & Evangelos Katsamakas, 2021. "COVID-19 and Financial Sustainability of Academic Institutions," Sustainability, MDPI, vol. 13(7), pages 1-24, April.
    • Handle: RePEc:gam:jsusta:v:13:y:2021:i:7:p:3903-:d:528126
    as

    Download full text from publisher

    File URL: https://www.mdpi.com/2071-1050/13/7/3903/pdf
    Download Restriction: no
    File URL: https://www.mdpi.com/2071-1050/13/7/3903/
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Nicholas C. Georgantzas & Evangelos G. Katsamakas, 2008. "Information systems research with system dynamics," System Dynamics Review, System Dynamics Society, vol. 24(3), pages 247-264, September.
    2. Raafat Mahmoud Zaini & Oleg V. Pavlov & Khalid Saeed & Michael J. Radzicki & Allen H. Hoffman & Kristen R. Tichenor, 2017. "Let's Talk Change in a University: A Simple Model for Addressing a Complex Agenda," Systems Research and Behavioral Science, Wiley Blackwell, vol. 34(3), pages 250-266, May.
    3. Martin F. G. Schaffernicht & Stefan N. Groesser, 2016. "A competence development framework for learning and teaching system dynamics," System Dynamics Review, System Dynamics Society, vol. 32(1), pages 52-81, January.
    4. Oleg V Pavlov & Evangelos Katsamakas, 2020. "Will colleges survive the storm of declining enrollments? A computational model," PLOS ONE, Public Library of Science, vol. 15(8), pages 1-29, August.
    5. Hassan Qudrat-Ullah, 2015. "Improving Human Performance in Dynamic Tasks through Debriefing," Proceedings of International Academic Conferences 3105092, International Institute of Social and Economic Sciences.
    6. Wesley J. Wildman & Saikou Y. Diallo & George Hodulik & Andrew Page & Andreas Tolk & Neha Gondal, 2020. "The Artificial University: Decision Support for Universities in the COVID-19 Era," Complexity, Hindawi, vol. 2020, pages 1-10, December.
    7. Jahangirian, Mohsen & Eldabi, Tillal & Naseer, Aisha & Stergioulas, Lampros K. & Young, Terry, 2010. "Simulation in manufacturing and business: A review," European Journal of Operational Research, Elsevier, vol. 203(1), pages 1-13, May.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Jangwan Ko & Seungsu Paek & Seoyoon Park & Jiwoo Park, 2021. "A News Big Data Analysis of Issues in Higher Education in Korea amid the COVID-19 Pandemic," Sustainability, MDPI, vol. 13(13), pages 1-18, June.
    2. Oleg V. Pavlov & Evangelos Katsamakas, 2024. "Tuition too high? Blame competition," Papers 2405.17762, arXiv.org.
    3. Borazon, Elaine Quintana & Chuang, Hsueh-Hua, 2023. "Resilience in educational system: A systematic review and directions for future research," International Journal of Educational Development, Elsevier, vol. 99(C).
    4. Pavlov, Oleg V. & Katsamakas, Evangelos, 2023. "Tuition too high? Blame competition," Journal of Economic Behavior & Organization, Elsevier, vol. 213(C), pages 409-431.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Oleg V. Pavlov & Evangelos Katsamakas, 2024. "Tuition too high? Blame competition," Papers 2405.17762, arXiv.org.
    2. Oleg V Pavlov & Evangelos Katsamakas, 2020. "Will colleges survive the storm of declining enrollments? A computational model," PLOS ONE, Public Library of Science, vol. 15(8), pages 1-29, August.
    3. Oleg V. Pavlov & Jason M. Sardell, 2023. "Economic Origins of the Sicilian Mafia: A Simulation Feedback Model," Papers 2304.07975, arXiv.org.
    4. Pavlov, Oleg V. & Katsamakas, Evangelos, 2023. "Tuition too high? Blame competition," Journal of Economic Behavior & Organization, Elsevier, vol. 213(C), pages 409-431.
    5. Evangelos Katsamakas, 2024. "Business models for the simulation hypothesis," Papers 2404.08991, arXiv.org.
    6. Laura Schmitt Olabisi & Amadou Sidibé, 2023. "Observations from a system dynamics modeling field school in Mali," System Dynamics Review, System Dynamics Society, vol. 39(1), pages 80-94, January.
    7. Christian Wankmüller & Maximilian Kunovjanek & Robert Gennaro Sposato & Gerald Reiner, 2020. "Selecting E-Mobility Transport Solutions for Mountain Rescue Operations," Energies, MDPI, vol. 13(24), pages 1-19, December.
    8. Evangelos Katsamakas & Oleg V. Pavlov & Ryan Saklad, 2024. "Artificial intelligence and the transformation of higher education institutions," Papers 2402.08143, arXiv.org.
    9. Thomas Vempiliyath & Maitri Thakur & Vincent Hargaden, 2021. "Development of a Hybrid Simulation Framework for the Production Planning Process in the Atlantic Salmon Supply Chain," Agriculture, MDPI, vol. 11(10), pages 1-17, September.
    10. Opacic, Luke & Sowlati, Taraneh & Mobini, Mahdi, 2018. "Design and development of a simulation-based decision support tool to improve the production process at an engineered wood products mill," International Journal of Production Economics, Elsevier, vol. 199(C), pages 209-219.
    11. Gürsu Aşιk & Zerrin Doğança Küçük, 2021. "Metacognition in action as a possible explanation for stock‐flow failure," System Dynamics Review, System Dynamics Society, vol. 37(4), pages 253-282, October.
    12. Bouslah, B. & Gharbi, A. & Pellerin, R., 2016. "Integrated production, sampling quality control and maintenance of deteriorating production systems with AOQL constraint," Omega, Elsevier, vol. 61(C), pages 110-126.
    13. Sondoss Elsawah & Elena Bakhanova & Raimo P. Hämäläinen & Alexey Voinov, 2023. "A Competency Framework for Participatory Modeling," Group Decision and Negotiation, Springer, vol. 32(3), pages 569-601, June.
    14. Maxim A. Maron, 2018. "Diagnostics of Projects," European Research Studies Journal, European Research Studies Journal, vol. 0(1), pages 18-30.
    15. Navonil Mustafee & Korina Katsaliaki & Paul Fishwick, 2014. "Exploring the modelling and simulation knowledge base through journal co-citation analysis," Scientometrics, Springer;Akadémiai Kiadó, vol. 98(3), pages 2145-2159, March.
    16. Trang Pham & Yung-Yu Tsai, 2024. "The Roles of Faculty Hiring and Retention in Shaping Diversity and Representation in US Higher Education Institutions: A Retrospective and Prospective Analysis from 2001 to 2035," Research in Higher Education, Springer;Association for Institutional Research, vol. 65(7), pages 1420-1460, November.
    17. Deepa Mishra & Sameer Kumar & Elkafi Hassini, 2019. "Current trends in disaster management simulation modelling research," Annals of Operations Research, Springer, vol. 283(1), pages 1387-1411, December.
    18. Christian Wankmüller & Gerald Reiner, 2020. "Coordination, cooperation and collaboration in relief supply chain management," Journal of Business Economics, Springer, vol. 90(2), pages 239-276, March.
    19. Andreas Felsberger & Gerald Reiner, 2020. "Sustainable Industry 4.0 in Production and Operations Management: A Systematic Literature Review," Sustainability, MDPI, vol. 12(19), pages 1-39, September.
    20. Linnéusson, Gary & Ng, Amos H.C. & Aslam, Tehseen, 2020. "A hybrid simulation-based optimization framework supporting strategic maintenance development to improve production performance," European Journal of Operational Research, Elsevier, vol. 281(2), pages 402-414.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:gam:jsusta:v:13:y:2021:i:7:p:3903-:d:528126. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: MDPI Indexing Manager (email available below). General contact details of provider: https://www.mdpi.com .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.