IDEAS home Printed from https://ideas.repec.org/a/kap/iaecre/v22y2016i4d10.1007_s11294-016-9602-z.html
   My bibliography  Save this article

Declining State Funding and Efficiency Effects on Public Higher Education: Government Really Does Matter

Author

Listed:
  • G. Thomas Sav

    (Wright State University)

Abstract

A stochastic cost frontier with inefficiency effects is estimated to investigate the impacts of decreases in state funding support on the operating efficiency of public colleges and universities in the U.S. Panel data for 378 institutions spanning 10 academic years, 2004 through 2013, captures the efficiency effects of declines in state funding from 32 % to 23 %. There are several improvements over early work of like kind that was, however, confined to four academic years, 2005 through 2008, and could not account for the accelerated effects of state funding decreases that followed the financial crisis. Inefficiency effects are extended to include both private giving as a substitute revenue source and federally funded Pell Grants. Empirical results are robust and support the notion that government does matter. Decreases in state funding create inefficiency in producing public higher education. Results also suggest the same for private giving and Pell Grant support, although the former was statistically weak at best. On the cost side, the results, not surprisingly, indicate that university administrators held costs down with hiring increases in non-tenure track faculty and staff relative to tenure track and tenured faculty.

Suggested Citation

  • G. Thomas Sav, 2016. "Declining State Funding and Efficiency Effects on Public Higher Education: Government Really Does Matter," International Advances in Economic Research, Springer;International Atlantic Economic Society, vol. 22(4), pages 397-408, November.
    • Handle: RePEc:kap:iaecre:v:22:y:2016:i:4:d:10.1007_s11294-016-9602-z
    DOI: 10.1007/s11294-016-9602-z
    as

    Download full text from publisher

    File URL: http://link.springer.com/10.1007/s11294-016-9602-z
    File Function: Abstract
    Download Restriction: Access to full text is restricted to subscribers.
    File URL: https://libkey.io/10.1007/s11294-016-9602-z?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Kiril Tochkov & Nikolay Nenovsky & Karin Tochkov, 2011. "University efficiency and public funding for higher education in Bulgaria," Post-Communist Economies, Taylor & Francis Journals, vol. 24(4), pages 517-534, November.
    2. G. Thomas Sav, 2010. "Private Giving Crowding Government Funding in Public Higher Education," American Journal of Economics and Business Administration, Science Publications, vol. 2(3), pages 293-299, September.
    3. Battese, G E & Coelli, T J, 1995. "A Model for Technical Inefficiency Effects in a Stochastic Frontier Production Function for Panel Data," Empirical Economics, Springer, vol. 20(2), pages 325-332.
    4. Aigner, Dennis & Lovell, C. A. Knox & Schmidt, Peter, 1977. "Formulation and estimation of stochastic frontier production function models," Journal of Econometrics, Elsevier, vol. 6(1), pages 21-37, July.
    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. Gralka, Sabine, 2018. "Stochastic frontier analysis in higher education: A systematic review," CEPIE Working Papers 05/18, Technische Universität Dresden, Center of Public and International Economics (CEPIE).
    2. Orosco Gavilán, Juan Carlos, 2023. "Measuring efficiency of Peruvian universities: a stochastic frontier analysis," DES - Working Papers. Statistics and Econometrics. WS 36250, Universidad Carlos III de Madrid. Departamento de Estadística.
    3. Cordis, Adriana S. & Muzatko, Steven, 2021. "Higher education spending and CPA exam performance," Journal of Accounting Education, Elsevier, vol. 55(C).

    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. Tom Kompas & Tuong Nhu Che & R. Quentin Grafton, 2004. "Technical efficiency effects of input controls: evidence from Australia's banana prawn fishery," Applied Economics, Taylor & Francis Journals, vol. 36(15), pages 1631-1641.
    2. Lundgren, Tommy & Marklund, Per-Olov & Zhang, Shanshan, 2016. "Industrial energy demand and energy efficiency – Evidence from Sweden," Resource and Energy Economics, Elsevier, vol. 43(C), pages 130-152.
    3. Daniel Solís & Boris E. Bravo‐Ureta & Ricardo E. Quiroga, 2009. "Technical Efficiency among Peasant Farmers Participating in Natural Resource Management Programmes in Central America," Journal of Agricultural Economics, Wiley Blackwell, vol. 60(1), pages 202-219, February.
    4. Andriakopoulos, Konstantinos & Ladas, Augoustinos & Andriakopoulos, Panagiotis, 2020. "Bank efficiency and leasing in U.S.A. banking system," MPRA Paper 112645, University Library of Munich, Germany.
    5. Giovanni Calice & Levent Kutlu & Ming Zeng, 2021. "Understanding US firm efficiency and its asset pricing implications," Empirical Economics, Springer, vol. 60(2), pages 803-827, February.
    6. António Afonso & Ana Patricia Montes & José M. Domínguez, 2024. "Measuring Tax Burden Efficiency in OECD Countries: An International Comparison," CESifo Working Paper Series 11333, CESifo.
    7. Barros, Carlos Pestana & Williams, Jonathan, 2013. "The random parameters stochastic frontier cost function and the effectiveness of public policy: Evidence from bank restructuring in Mexico," International Review of Financial Analysis, Elsevier, vol. 30(C), pages 98-108.
    8. Khanal, Aditya & Koirala, Krishna & Regmi, Madhav, 2016. "Do Financial Constraints Affect Production Efficiency in Drought Prone Areas? A Case from Indonesian Rice Growers," 2016 Annual Meeting, February 6-9, 2016, San Antonio, Texas 230087, Southern Agricultural Economics Association.
    9. Firna Varina & Sri Hartoyo & Nunung Kusnadi & Amzul Rifin, 2020. "The Determinants of Technical Efficiency of Oil Palm Smallholders in Indonesia," International Journal of Economics and Financial Issues, Econjournals, vol. 10(6), pages 89-93.
    10. Markose Chekol Zewdie & Michele Moretti & Daregot Berihun Tenessa & Zemen Ayalew Ayele & Jan Nyssen & Enyew Adgo Tsegaye & Amare Sewnet Minale & Steven Van Passel, 2021. "Agricultural Technical Efficiency of Smallholder Farmers in Ethiopia: A Stochastic Frontier Approach," Land, MDPI, vol. 10(3), pages 1-17, March.
    11. Dhehibi, Boubaker & Lachaal, Lassaad & Elloumi, Mohamed & Messaoud, Emna B., 2007. "Measurement and Sources of Technical Inefficiency in the Tunisian Citrus Growing Sector," 103rd Seminar, April 23-25, 2007, Barcelona, Spain 9391, European Association of Agricultural Economists.
    12. Stephen M. Miller & Terrence M. Clauretie & Thomas M. Springer, 2006. "Economies Of Scale And Cost Efficiencies: A Panel‐Data Stochastic‐Frontier Analysis Of Real Estate Investment Trusts," Manchester School, University of Manchester, vol. 74(4), pages 483-499, July.
    13. Noel Uri, 2003. "The Effect of Incentive Regulation in Telecommunications in the United States," Quality & Quantity: International Journal of Methodology, Springer, vol. 37(2), pages 169-191, May.
    14. Tauer, Loren W. & Mishra, Ashok K., 2005. "U.S. Dairy Farm Cost Efficiency," Working Papers 127079, Cornell University, Department of Applied Economics and Management.
    15. Fabiana Rocha & Igor Viveiros Souza, 2007. "Reajuste De Preços Na Indústria Farmacêutica Brasileira E O Fator X: Uma Avaliação Usando O Método De Fronteiras Estocásticas," Anais do XXXV Encontro Nacional de Economia [Proceedings of the 35th Brazilian Economics Meeting] 041, ANPEC - Associação Nacional dos Centros de Pós-Graduação em Economia [Brazilian Association of Graduate Programs in Economics].
    16. Gangopadhyay, Partha & Jain, Siddharth & Bakry, Walid, 2022. "In search of a rational foundation for the massive IT boom in the Australian banking industry: Can the IT boom really drive relationship banking?," International Review of Financial Analysis, Elsevier, vol. 82(C).
    17. Kangile, Rajabu Joseph, 2015. "Efficiency In Production By Smallholder Rice Farmers Under Cooperative Irrigation Schemes In Pwani And Morogoro Regions, Tanzania," Research Theses 265681, Collaborative Masters Program in Agricultural and Applied Economics.
    18. Williams, Jonathan, 2004. "Determining management behaviour in European banking," Journal of Banking & Finance, Elsevier, vol. 28(10), pages 2427-2460, October.
    19. Roy, Manish & Mazumder, Ritwik, 2016. "Technical Efficiency of Fish Catch in Traditional Fishing: A Study in Southern Assam," Journal of Regional Development and Planning, Rajarshi Majumder, vol. 5(1), pages 55-68.
    20. Veronika Fenyves & Tibor Tarnóczi & Zoltán Bács & Dóra Kerezsi & Péter Bajnai & Mihály Szoboszlai, 2022. "Financial efficiency analysis of Hungarian agriculture, fisheries and forestry sector," Agricultural Economics, Czech Academy of Agricultural Sciences, vol. 68(11), pages 413-426.

    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:kap:iaecre:v:22:y:2016:i:4:d:10.1007_s11294-016-9602-z. 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: Sonal Shukla or Springer Nature Abstracting and Indexing (email available below). General contact details of provider: http://www.springer.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.