IDEAS home Printed from https://ideas.repec.org/a/spr/reihed/v60y2019i5d10.1007_s11162-018-9526-y.html
   My bibliography  Save this article

Public Tuition on the Rise: Estimating the Effects of Louisiana’s Performance-Based Funding Policy on Institutional Tuition Levels

Author

Listed:
  • Xiaodan Hu

    (Northern Illinois University)

  • Pedro Villarreal

    (University of Pennsylvania)

Abstract

Louisiana’s performance-based funding (PBF) policy is one of the most recent implementations of performance funding established by a state for accountability purposes. Instead of examining direct academic outcomes, this study focuses on tuition increase as an (un)intended outcome of PBF implementation. We use data from multiple sources to create a panel dataset of public postsecondary institutions across the United States from 2005 to 2013. Applying Difference-in-Differences and propensity score analyses procedures to estimate the causal relationship between PBF implementation and tuition levels at public institutions in Louisiana, our results indicate that treated community colleges responded to PBF by increasing tuition levels statistically significantly above that of their counterfactual institutions. While in-state tuition and fees rose statistically significantly faster at public universities in Louisiana after PBF implementation, out-of-state tuition and fees charged by the treated 4-year institutions did not significantly differ from the increases experienced at counterfactual institutions in non-PBF states. We explore possible explanations for the findings and provide implications for practices and future research.

Suggested Citation

  • Xiaodan Hu & Pedro Villarreal, 2019. "Public Tuition on the Rise: Estimating the Effects of Louisiana’s Performance-Based Funding Policy on Institutional Tuition Levels," Research in Higher Education, Springer;Association for Institutional Research, vol. 60(5), pages 636-669, August.
    • Handle: RePEc:spr:reihed:v:60:y:2019:i:5:d:10.1007_s11162-018-9526-y
    DOI: 10.1007/s11162-018-9526-y
    as

    Download full text from publisher

    File URL: http://link.springer.com/10.1007/s11162-018-9526-y
    File Function: Abstract
    Download Restriction: Access to the full text of the articles in this series is restricted.
    File URL: https://libkey.io/10.1007/s11162-018-9526-y?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. Richard K. Crump & V. Joseph Hotz & Guido W. Imbens & Oscar A. Mitnik, 2009. "Dealing with limited overlap in estimation of average treatment effects," Biometrika, Biometrika Trust, vol. 96(1), pages 187-199.
    2. Fethke, Gary, 2005. "Strategic determination of higher education subsidies and tuitions," Economics of Education Review, Elsevier, vol. 24(5), pages 601-609, October.
    3. Card, David & Krueger, Alan B, 1994. "Minimum Wages and Employment: A Case Study of the Fast-Food Industry in New Jersey and Pennsylvania," American Economic Review, American Economic Association, vol. 84(4), pages 772-793, September.
    4. Terry Long, B.Bridget, 2004. "How have college decisions changed over time? An application of the conditional logistic choice model," Journal of Econometrics, Elsevier, vol. 121(1-2), pages 271-296.
    5. Ashenfelter, Orley C, 1978. "Estimating the Effect of Training Programs on Earnings," The Review of Economics and Statistics, MIT Press, vol. 60(1), pages 47-57, February.
    6. Robert Kelchen, 2018. "Do Performance-Based Funding Policies Affect Underrepresented Student Enrollment?," The Journal of Higher Education, Taylor & Francis Journals, vol. 89(5), pages 702-727, September.
    7. Robert B. Archibald & David H. Feldman, 2008. "Explaining Increases in Higher Education Costs," The Journal of Higher Education, Taylor & Francis Journals, vol. 79(3), pages 268-295, May.
    8. William R. Doyle, 2012. "The Politics of Public College Tuition and State Financial Aid," The Journal of Higher Education, Taylor & Francis Journals, vol. 83(5), pages 617-647, September.
    9. Levine, Phillip B. & Zimmerman, David J. (ed.), 2010. "Targeting Investments in Children," National Bureau of Economic Research Books, University of Chicago Press, number 9780226475813, July.
    10. Rajindar Koshal & Manjulika Koshal, 2000. "State Appropriation and Higher Education Tuition: What is the relationship?," Education Economics, Taylor & Francis Journals, vol. 8(1), pages 81-89.
    11. Alberto Abadie, 2005. "Semiparametric Difference-in-Differences Estimators," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 72(1), pages 1-19.
    12. Giovanni Cerulli, 2022. "Econometric Evaluation of Socio-Economic Programs," Advanced Studies in Theoretical and Applied Econometrics, Springer, edition 2, number 978-3-662-65945-8.
    13. Katharina Best & Jussi Keppo, 2014. "The credits that count: how credit growth and financial aid affect college tuition and fees," Education Economics, Taylor & Francis Journals, vol. 22(6), pages 589-613, December.
    14. James J. Heckman & Jeffrey A. Smith, 1999. "The Pre-Program Earnings Dip and the Determinants of Participation in a Social Program: Implications for Simple Program Evaluation Strategies," NBER Working Papers 6983, National Bureau of Economic Research, Inc.
    15. Marianne Bertrand & Esther Duflo & Sendhil Mullainathan, 2004. "How Much Should We Trust Differences-In-Differences Estimates?," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 119(1), pages 249-275.
    16. Thomas D. Cook & William R. Shadish & Vivian C. Wong, 2008. "Three conditions under which experiments and observational studies produce comparable causal estimates: New findings from within-study comparisons," Journal of Policy Analysis and Management, John Wiley & Sons, Ltd., vol. 27(4), pages 724-750.
    17. Mixon, Franklin Jr & Hsing, Yu, 1994. "The determinants of out-of-state enrollments in higher education: A tobit analysis," Economics of Education Review, Elsevier, vol. 13(4), pages 329-335.
    18. Baltagi, Badi H. & Wu, Ping X., 1999. "Unequally Spaced Panel Data Regressions With Ar(1) Disturbances," Econometric Theory, Cambridge University Press, vol. 15(6), pages 814-823, December.
    19. Heckman, James J & Smith, Jeffrey A, 1999. "The Pre-programme Earnings Dip and the Determinants of Participation in a Social Programme. Implications for Simple Programme Evaluation Strategies," Economic Journal, Royal Economic Society, vol. 109(457), pages 313-348, July.
    20. Joseph C. Burke & Shahpar Modarresi, 2000. "To Keep or Not to Keep Performance Funding," The Journal of Higher Education, Taylor & Francis Journals, vol. 71(4), pages 432-453, July.
    21. Phillip B. Levine & David J. Zimmerman, 2010. "Targeting Investments in Children: Fighting Poverty When Resources Are Limited," NBER Books, National Bureau of Economic Research, Inc, number levi09-1, June.
    22. Phillip B. Levine & David J. Zimmerman, 2010. "Introduction to "Targeting Investments in Children: Fighting Poverty When Resources are Limited"," NBER Chapters, in: Targeting Investments in Children: Fighting Poverty When Resources Are Limited, pages 3-11, National Bureau of Economic Research, Inc.
    23. E. Grady Bogue & Betty Dandridge Johnson, 2010. "Performance incentives and public college accountability in the United States: a quarter century policy audit," Higher Education Management and Policy, OECD Publishing, vol. 22(2), pages 1-22.
    24. Andrew W. Nutting, 2014. "Tuition and the outcomes of community college attendance: simulations for academic-program and occupational-program students," Education Economics, Taylor & Francis Journals, vol. 22(6), pages 614-634, December.
    25. Michael N. Mitchell, 2010. "Data Management Using Stata: A Practical Handbook," Stata Press books, StataCorp LP, number dmus.
    26. Caroline M. Hoxby, 1997. "How the Changing Market Structure of U.S. Higher Education Explains College Tuition," NBER Working Papers 6323, National Bureau of Economic Research, Inc.
    27. A. Colin Cameron & Pravin K. Trivedi, 2010. "Microeconometrics Using Stata, Revised Edition," Stata Press books, StataCorp LP, number musr.
    28. Joshua D. Angrist & Jörn-Steffen Pischke, 2015. "The path from cause to effect: mastering 'metrics," CentrePiece - The magazine for economic performance 442, Centre for Economic Performance, LSE.
    29. Nicholas W. Hillman & David A. Tandberg & Jacob P. K. Gross, 2014. "Performance Funding in Higher Education: Do Financial Incentives Impact College Completions?," The Journal of Higher Education, Taylor & Francis Journals, vol. 85(6), pages 826-857, November.
    30. Juan M. Villa, 2016. "diff: Simplifying the estimation of difference-in-differences treatment effects," Stata Journal, StataCorp LP, vol. 16(1), pages 52-71, March.
    31. Jennifer A. Delaney & Tyler D. Kearney, 2016. "Alternative Student-Based Revenue Streams for Higher Education Institutions: A Difference-in-Difference Analysis Using Guaranteed Tuition Policies," The Journal of Higher Education, Taylor & Francis Journals, vol. 87(5), pages 731-769, September.
    32. J. Scott Long, 2009. "The Workflow of Data Analysis Using Stata," Stata Press books, StataCorp LP, number wdaus.
    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. Kelchen, Robert & Ortagus, Justin & Rosinger, Kelly & Cassell, Alex, 2022. "The effects of state performance funding policies on student loan debt," Economics of Education Review, Elsevier, vol. 91(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. Guido W. Imbens & Jeffrey M. Wooldridge, 2009. "Recent Developments in the Econometrics of Program Evaluation," Journal of Economic Literature, American Economic Association, vol. 47(1), pages 5-86, March.
    2. van der Klaauw, Bas, 2014. "From micro data to causality: Forty years of empirical labor economics," Labour Economics, Elsevier, vol. 30(C), pages 88-97.
    3. Martha Bailey & Olga Malkova & Zoë M. McLaren, 2017. "Does Parents' Access to Family Planning Increase Children's Opportunities? Evidence from the War on Poverty and the Early Years of Title X," Working Papers 2017-083, Human Capital and Economic Opportunity Working Group.
    4. Schaubert, Marianna, 2018. "Do Alimony Regulations Matter inside Marriage? Evidence from the 2008 Reform of the German Maintenance Law," VfS Annual Conference 2018 (Freiburg, Breisgau): Digital Economy 181508, Verein für Socialpolitik / German Economic Association.
    5. Heiland, Frank & Korenman, Sanders & Smith, Rachel A., 2019. "Estimating the educational consequences of teenage childbearing: Identification, heterogeneous effects and the value of biological relationship information," Economics & Human Biology, Elsevier, vol. 33(C), pages 15-28.
    6. Robert S. Chirinko & Daniel J. Wilson, 2023. "Job Creation Tax Credits, Fiscal Foresight, and Job Growth: Evidence from US States," National Tax Journal, University of Chicago Press, vol. 76(3), pages 481-523.
    7. Peter Z. Schochet, 2021. "Statistical Power for Estimating Treatment Effects Using Difference-in-Differences and Comparative Interrupted Time Series Designs with Variation in Treatment Timing," Papers 2102.06770, arXiv.org, revised Oct 2021.
    8. Katherine Baicker & Theodore Svoronos, 2019. "Testing the Validity of the Single Interrupted Time Series Design," CID Working Papers 364, Center for International Development at Harvard University.
    9. Andrea Pronti & Julio Berbel, 2020. "Analysis of the impact of a volumetric tariff for irrigation in Northern Italy through the “Inverse DiD†approach," SEEDS Working Papers 1320, SEEDS, Sustainability Environmental Economics and Dynamics Studies, revised Jul 2020.
    10. LeGower, Michael & Walsh, Randall, 2017. "Promise scholarship programs as place-making policy: Evidence from school enrollment and housing prices," Journal of Urban Economics, Elsevier, vol. 101(C), pages 74-89.
    11. Katherine Baicker & Theodore Svoronos, 2019. "Testing the Validity of the Single Interrupted Time Series Design," NBER Working Papers 26080, National Bureau of Economic Research, Inc.
    12. Marianna Schaubert, 2023. "Do Alimony Regulations Matter Inside Marriage? Evidence from the 2008 Reform of the German Maintenance Law," Journal of Labor Research, Springer, vol. 44(1), pages 145-178, June.
    13. Apeti, Ablam Estel & N’Doua, Bossoma Doriane, 2023. "The impact of timber regulations on timber and timber product trade," Ecological Economics, Elsevier, vol. 213(C).
    14. Alpert, Abby, 2016. "The anticipatory effects of Medicare Part D on drug utilization," Journal of Health Economics, Elsevier, vol. 49(C), pages 28-45.
    15. Callaway, Brantly & Sant’Anna, Pedro H.C., 2021. "Difference-in-Differences with multiple time periods," Journal of Econometrics, Elsevier, vol. 225(2), pages 200-230.
    16. Ramboer, Sander & Reynaerts, Jo, 2020. "Indecent proposals: Estimating the impact of regional state aid through EU guideline compliance," Regional Science and Urban Economics, Elsevier, vol. 82(C).
    17. Lechner, Michael, 2011. "The Estimation of Causal Effects by Difference-in-Difference Methods," Foundations and Trends(R) in Econometrics, now publishers, vol. 4(3), pages 165-224, November.
    18. Schaubert, Marianna, 2018. "Do Alimony Regulations Matter inside Marriage? Evidence from the 2008 Reform of the German Maintenance Law," EconStor Preprints 173193, ZBW - Leibniz Information Centre for Economics.
    19. Schumann, Mathias, 2017. "The effects of minimum wages on firm-financed apprenticeship training," Labour Economics, Elsevier, vol. 47(C), pages 163-181.
    20. Myoung-jae Lee & Yasuyuki Sawada, 2020. "Review on Difference in Differences," Korean Economic Review, Korean Economic Association, vol. 36, pages 135-173.

    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:spr:reihed:v:60:y:2019:i:5:d:10.1007_s11162-018-9526-y. 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.