Do not Discard $16 Billion: Accounting for IPEDS Administrative Unit Observations

The IPEDS Finance survey is a key resource for academic research, policy analysis, and efforts to improve transparency and accountability. However, the data from the survey can be difficult to use properly. This research note addresses a specific challenge: how to incorporate the $16 billion in revenues and expenditures reported annually within administrative unit observations. Commonly used procedures for preparing IPEDS finance data lead researchers to incorporate none or only a portion of these dollars. When incorporated, the dollars are often assigned to only some of the institutions affiliated with the administrative unit. To better understand this issue, I analyze IPEDS data to reveal five novel findings regarding revenues and expenditures held within administrative unit observations. The results show that this challenge is most relevant for public institutions, certain revenues and expenditure categories, and longitudinal analysis. To support researchers, I offer clear guidance for fully incorporating these dollars and linking them to all relevant institutions. The guidance includes a simple decision rule that will prove useful for most studies. Supplementary resources are provided to facilitate implementation. This research note ends with an illustration demonstrating how research findings can meaningfully vary based on the treatment of administrative unit observations.