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Organizational Behavior in Private Nonprofits: A Study of Liberal Arts Colleges


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  • David Chu

    (Department of Economics, College of the Holy Cross)

  • John F. O'Connell

    (Department of Economics, College of the Holy Cross)

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    An effort is made to examine empirically the behavior of private nonprofit liberal arts colleges. The conventional wisdom that nonprofits arise to insure quality in a context of asymmetric information, and that behavior is driven by the need to insure implicit contract compliance is studied. A three-equation model is estimated for the demand price and quality of liberal arts education. Among the conclusions are that consumers are able to acquire and respond to information, that market forces analogous to those in the private sector insure contract compliance and that price premia are not systematically related to quality differentials. The endowment proves to be a means of moderating price increases rather than an end in itself.

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    Bibliographic Info

    Paper provided by College of the Holy Cross, Department of Economics in its series Working Papers with number 9402.

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    Length: 28 pages
    Date of creation: Sep 1994
    Date of revision:
    Publication status: Published in Research in Healthcare Financial Management, August 2001, Vol. 6:1, pp. 1-19.
    Handle: RePEc:hcx:wpaper:9402

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    Keywords: Organizational behavior; Financial management; liberal arts colleges; nonprofits;


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