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The Sensitivity of Capital Use to Price in Higher Education

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  • Malcolm Getz

    ()
    (Deparment of Economics, Vanderbilt Unversity)

  • John J. Siegfried

    ()
    (Department of Economics, Vanderbilt University)

Abstract

We test whether U.S. colleges and universities adjust their physical capital intensity to differences in factor prices by regressing the square feet of space per student on construction prices across institutions. The results indicate that physical space at selective liberal arts colleges and private comprehensive universities is unresponsive to relative factor prices. At public universities comprehensive universities the evidence suggests that students enjoy more space where building costs are lower. We are unable to explain a relationship for two-year colleges.

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File URL: http://www.accessecon.com/pubs/VUECON/vu04-w05.pdf
File Function: First version, 2004
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Bibliographic Info

Paper provided by Vanderbilt University Department of Economics in its series Vanderbilt University Department of Economics Working Papers with number 0405.

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Date of creation: Feb 2004
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Handle: RePEc:van:wpaper:0405

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Web page: http://www.vanderbilt.edu/econ/wparchive/index.html

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Keywords: factor price effects on college input ratios;

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  1. Gordon C. Winston & Yen, I.C., 1995. "Costs, Prices, Subsidies, and Aid in U.S. Higher Education," Williams Project on the Economics of Higher Education, Department of Economics, Williams College DP-32, Department of Economics, Williams College.
  2. Gordon C. Winston & Lewis, E.G., 1996. "Physical Capital and Capital Costs in US Colleges and Universities: 1993," Williams Project on the Economics of Higher Education, Department of Economics, Williams College DP-35, Department of Economics, Williams College.
  3. Getz, Malcolm & Siegfried, John J. & Zhang, Hao, 1991. "Estimating economies of scale in higher education," Economics Letters, Elsevier, Elsevier, vol. 37(2), pages 203-208, October.
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