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The economics of universities in a new age of funding options

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  • Just, Richard E.
  • Huffman, Wallace E.

Abstract

The environment in which universities in the United States and some other countries operate has been changing, creating discussion of privatization of public universities. This paper examines the implications for US universities of greater access to royalties for federally funded, private-goods research, and reduced government grants or transfers to support public-goods research. Conditions under which increased private-goods research for out-of-state firms (developing patents and private market applications) leads to higher tuition and reductions in instruction and basic research are developed. The likely outcome is greater privatization of public universities, which may lead to a new public-private structure for what have been the leading US public research universities.

Suggested Citation

  • Just, Richard E. & Huffman, Wallace E., 2009. "The economics of universities in a new age of funding options," Research Policy, Elsevier, vol. 38(7), pages 1102-1116, September.
  • Handle: RePEc:eee:respol:v:38:y:2009:i:7:p:1102-1116
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    References listed on IDEAS

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    1. repec:hrv:faseco:30747152 is not listed on IDEAS
    2. Richard E. Just & Wallace E. Huffman, 1992. "Economic Principles and Incentives: Structure, Management, and Funding of Agricultural Research in the United States," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 74(5), pages 1101-1108.
    3. Nelson, Richard R., 2004. "The market economy, and the scientific commons," Research Policy, Elsevier, vol. 33(3), pages 455-471, April.
    4. Rebecca Henderson & Adam B. Jaffe & Manuel Trajtenberg, 1998. "Universities As A Source Of Commercial Technology: A Detailed Analysis Of University Patenting, 1965-1988," The Review of Economics and Statistics, MIT Press, vol. 80(1), pages 119-127, February.
    5. Khanna, Jyoti & Huffman, Wallace E & Sandler, Todd, 1994. "Agricultural Research Expenditures in the United States: A Public Goods Perspective," The Review of Economics and Statistics, MIT Press, vol. 76(2), pages 267-277, May.
    6. McMillan, G. Steven & Narin, Francis & Deeds, David L., 2000. "An analysis of the critical role of public science in innovation: the case of biotechnology," Research Policy, Elsevier, vol. 29(1), pages 1-8, January.
    7. Wallace E. Huffman & Richard E. Just, 2000. "Setting Efficient Incentives for Agricultural Research: Lessons from Principal-Agent Theory," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 82(4), pages 828-841.
    8. Claudia Goldin & Lawrence F. Katz, 1999. "The Shaping of Higher Education: The Formative Years in the United States, 1890 to 1940," Journal of Economic Perspectives, American Economic Association, vol. 13(1), pages 37-62, Winter.
    9. Huffman, Wallace E. & Evenson, Robert E., 1993. "Science for Agriculture: A Long Term Perspective," Staff General Research Papers Archive 10997, Iowa State University, Department of Economics.
    10. Jaffe, Adam B., 2000. "The U.S. patent system in transition: policy innovation and the innovation process," Research Policy, Elsevier, vol. 29(4-5), pages 531-557, April.
    11. Marie Thursby & Richard Jensen, 2001. "Proofs and Prototypes for Sale: The Licensing of University Inventions," American Economic Review, American Economic Association, vol. 91(1), pages 240-259, March.
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    Citations

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    Cited by:

    1. Wipo, 2011. "World Intellectual Property Report 2011- The Changing Face of Innovation," WIPO Economics & Statistics Series, World Intellectual Property Organization - Economics and Statistics Division, number 2011:944, October.
    2. repec:wsi:ijimxx:v:21:y:2017:i:02:n:s1363919617500177 is not listed on IDEAS
    3. Huffman, Wallace, 2009. "Investing in People for the 21st Century," Staff General Research Papers Archive 13127, Iowa State University, Department of Economics.
    4. Fukuyama, Hirofumi & Weber, William L. & Xia, Yin, 2016. "Time substitution and network effects with an application to nanobiotechnology policy for US universities," Omega, Elsevier, vol. 60(C), pages 34-44.
    5. Bradley J. Rickard & Timothy J. Richards & Jubo Yan, 2016. "University licensing of patents for varietal innovations in agriculture," Agricultural Economics, International Association of Agricultural Economists, vol. 47(1), pages 3-14, January.
    6. Tiffany Shih & Brian Wright, 2011. "Agricultural Innovation," NBER Chapters,in: Accelerating Energy Innovation: Insights from Multiple Sectors, pages 49-85 National Bureau of Economic Research, Inc.
    7. Gallardo, R. Karina & McCluskey, Jill J. & Rickard, Bradley J. & Akhundjanov, Sherzod B., 2016. "Assessing Innovator and Grower Profit Potential under Different New Plant Variety Commercialization Strategies," 2016 Annual Meeting, July 31-August 2, 2016, Boston, Massachusetts 235940, Agricultural and Applied Economics Association.
    8. Javier García-Estévez & Néstor Duch-Brown, 2012. "Student graduation: to what extent does university expenditure matter?," Working Papers 2012/4, Institut d'Economia de Barcelona (IEB).
    9. Stéphanie Chatelain-Ponroy & Christine Musselin & Stéphanie Mignot-Gérard & Samuel Sponem, 2013. "Reforms in French Public Universities. How does commitment to performance match with commitment to public values?," Post-Print halshs-00842166, HAL.
    10. Sparger, John Adam & Norton, George W. & Heisey, Paul W. & Alwang, Jeffrey, 2013. "Is the share of agricultural maintenance research rising in the United States?," Food Policy, Elsevier, vol. 38(C), pages 126-135.

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