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State Appropriation and Higher Education Tuition: What is the relationship?

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  • Rajindar Koshal
  • Manjulika Koshal

Abstract

This paper utilizes a simultaneous equation model to explain the relationship between state appropriation and the level of tuition at higher educational public institutions. Statistical results based on data from 47 continental states of the US indicate that tuition depends upon state appropriation, median family income, out of state enrollment as a percentage of total enrollment, and the region that a particular state is located. Additionally, state appropriation is affected by the level of tuition, per-capita tax revenue, demand factor, 2-year college enrollment as a percentage of total enrollments, and the clear majority of democrats in the state legislature. The results also indicate a clear interdependence of tuition and appropriation at the public institutions in the US.

Suggested Citation

  • 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.
    • Handle: RePEc:taf:edecon:v:8:y:2000:i:1:p:81-89
    DOI: 10.1080/096452900110319
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    References listed on IDEAS

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    1. Greene, Kenneth V, 1994. "The Public Choice of Non-resident College Tuition Levels," Public Choice, Springer, vol. 78(3-4), pages 231-240, March.
    2. Don Hossler & Jon P. Lund & Jackie Ramin & Sarah Westfall & Steve Irish, 1997. "State Funding for Higher Education," The Journal of Higher Education, Taylor & Francis Journals, vol. 68(2), pages 160-190, March.
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    Cited by:

    1. Joan Rosselló, 2007. "Does a public university system avoid the stratification of public universities and the segregation of students?," DEA Working Papers 26, Universitat de les Illes Balears, Departament d'Economía Aplicada.
    2. Michael Rizzo & Ronald G. Ehrenberg, 2004. "Resident and Nonresident Tuition and Enrollment at Flagship State Universities," NBER Chapters, in: College Choices: The Economics of Where to Go, When to Go, and How to Pay For It, pages 303-354, National Bureau of Economic Research, Inc.
    3. Iryna Lendel & Haifeng Qian, 2017. "Inside the Great Recession: University Products and Regional Economic Development," Growth and Change, Wiley Blackwell, vol. 48(1), pages 153-173, March.
    4. Hemelt, Steven W. & Marcotte, Dave E., 2008. "Rising Tuition and Enrollment in Public Higher Education," IZA Discussion Papers 3827, Institute of Labor Economics (IZA).
    5. Justin C. Ortagus & Lijing Yang, 2018. "An Examination of the Influence of Decreases in State Appropriations on Online Enrollment at Public Universities," Research in Higher Education, Springer;Association for Institutional Research, vol. 59(7), pages 847-865, November.
    6. Nicole M. Fortin, 2006. "Higher-Education Policies and the College Wage Premium: Cross-State Evidence from the 1990s," American Economic Review, American Economic Association, vol. 96(4), pages 959-987, September.
    7. Robert R. Dunn, 2015. "Outmigration and State and Local Appropriations for Public Higher Education," The Review of Regional Studies, Southern Regional Science Association, vol. 45(3), pages 237-251, Winter.
    8. Grey Gordon & Aaron Hedlund, 2017. "Accounting for the Rise in College Tuition," NBER Chapters, in: Education, Skills, and Technical Change: Implications for Future US GDP Growth, pages 357-394, National Bureau of Economic Research, Inc.
    9. Robert B. Archibald & David H. Feldman, 2006. "State Higher Education Spending and the Tax Revolt," The Journal of Higher Education, Taylor & Francis Journals, vol. 77(4), pages 618-644, July.
    10. Jennifer A. Delaney & Dhammika Dharmapala, 2017. "“Pay It Forward” And Higher Education Subsidies: A Median Voter Model," Contemporary Economic Policy, Western Economic Association International, vol. 35(4), pages 615-629, October.
    11. Fethke, Gary, 2005. "Strategic determination of higher education subsidies and tuitions," Economics of Education Review, Elsevier, vol. 24(5), pages 601-609, October.
    12. Bo Zhao, 2018. "Disinvesting in the future?: a comprehensive examination of the effects of state appropriations for public higher education," Working Papers 18-1, Federal Reserve Bank of Boston.
    13. Fumitoshi Mizutani & Noriyoshi Nakayama & Tomoyasu Tanaka, 2015. "Determinants of University Tuition in Japan," Discussion Papers 2015-08, Kobe University, Graduate School of Business Administration.
    14. Matthew Nagler, 2008. "Funding Shocks and Optimal University Admissions and Financial Aid Policies," Atlantic Economic Journal, Springer;International Atlantic Economic Society, vol. 36(3), pages 345-358, September.
    15. 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.
    16. Bo Zhao, 2018. "State disinvestment in higher education: the impact on public research universities' patent applications," Working Papers 19-2, Federal Reserve Bank of Boston.
    17. Aaron Hedlund & Grey Gordon, 2017. "Accounting for Tuition Increases at U.S. Colleges," 2017 Meeting Papers 1550, Society for Economic Dynamics.
    18. Sarena Goodman & Alice Henriques Volz, 2020. "Attendance Spillovers between Public and For-Profit Colleges: Evidence from Statewide Variation in Appropriations for Higher Education," Education Finance and Policy, MIT Press, vol. 15(3), pages 428-456, Summer.

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