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Using Panel Data to Examine Legislative Demand for Higher Education

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  • Robert Toutkoushian
  • Paula Hollis

Abstract

Empirical studies of legislative demand for higher education, using cross-sectional date for all 50 states, have not found much evidence that economic and demographic factors influence state higher education appropriations. This study uses panel data on state appropriations from 1982 through 1996 to examine the sensitivity of the results from the legislative demand model to changes in statistical methodology employed. The results show that the signs and significance levels of variables used in the legislative demand model vary widely when ordinary least squares, fixed effects and two-stage least squares are used. In particular, after controlling for state effects in the panel data, a number of the expected relationships between state appropriations and both economic and demographic factors emerge. There is also some evedence that K-12 education is a significant competing interest group for higher education, and that the legislative demand functions for higher education vary by geographical region and whether funding formulae are used to help determine higher education appropriations.

Suggested Citation

  • Robert Toutkoushian & Paula Hollis, 1998. "Using Panel Data to Examine Legislative Demand for Higher Education," Education Economics, Taylor & Francis Journals, vol. 6(2), pages 141-157.
    • Handle: RePEc:taf:edecon:v:6:y:1998:i:2:p:141-157
    DOI: 10.1080/09645299800000012
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    Cited by:

    1. Michael L. Marlow & Alden F. Shiers, 2001. "Do Crime-Related Expenditures Crowd out Higher Education Expenditures?," Public Finance Review, , vol. 29(5), pages 369-393, September.
    2. Amy Y. Li, 2017. "Dramatic Declines in Higher Education Appropriations: State Conditions for Budget Punctuations," Research in Higher Education, Springer;Association for Institutional Research, vol. 58(4), pages 395-429, June.
    3. Gregory M. Perry, 2023. "Cooperative extension, experiment station, and Land Grant Universities: Competitors or partners for state funding?," Applied Economic Perspectives and Policy, John Wiley & Sons, vol. 45(2), pages 947-969, June.
    4. Chatterji, Aaron K. & Kim, Joowon & McDevitt, Ryan C., 2018. "School spirit: Legislator school ties and state funding for higher education," Journal of Public Economics, Elsevier, vol. 164(C), pages 254-269.
    5. Havranek, Tomas & Irsova, Zuzana & Zeynalova, Olesia, 2017. "Tuition Reduces Enrollment Less Than Commonly Thought," MPRA Paper 78813, University Library of Munich, Germany.
    6. Michael K. McLendon & David A. Tandberg & Nicholas W. Hillman, 2014. "Financing College Opportunity," The ANNALS of the American Academy of Political and Social Science, , vol. 655(1), pages 143-162, September.

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