IDEAS home Printed from
   My bibliography  Save this paper

Managerial Efficiency in Nonprofit Private Higher Education


  • David Chu

    () (Department of Economics, College of the Holy Cross)

  • John F. O'Connell

    () (Department of Economics, College of the Holy Cross)


Traditional market indicators (profits, stock prices, etc.) are absent in the nonprofit sector, and, given the shortcomings of variance analysis in analyzing nonprofit budgets, the potential for conflicts between the principal (providers of funds) and the agent (management) abound. Resource-providers to nonprofit entities need a framework in which to evaluate management performance in terms of the efficient use of resources. Based on data obtained from a sample of 33 Tennessee county jails, Hayes and Millar (1990) used a translog budget model to test the responsiveness of cost shares to changes in relative input prices and operating characteristics. Their study presented empirical results that implied managerial responsiveness to such changes. Out study extends that of Hayes and Millar by using a translog budget model to investigate management response to changes in relative input prices and operating characteristics in a nonprofit higher education setting. A system of translog cost and cost share equations is used to analyze data obtained from a national sample of 349 liberal arts colleges. Results of this study are generally consistent with those in the Hayes-Millar study. The translog model is an appropriate approximation of the cost function, and cost shares vary significantly with variations in input prices and operating characteristics of private nonprofit colleges. The results imply that managers do vary their input mix in response to changes in relative input prices and to changes in the operating characteristics. College managements appear to be concerned with efficiency both allocatively and technically.

Suggested Citation

  • David Chu & John F. O'Connell, 1994. "Managerial Efficiency in Nonprofit Private Higher Education," Working Papers 9403, College of the Holy Cross, Department of Economics.
  • Handle: RePEc:hcx:wpaper:9403

    Download full text from publisher

    To our knowledge, this item is not available for download. To find whether it is available, there are three options:
    1. Check below whether another version of this item is available online.
    2. Check on the provider's web page whether it is in fact available.
    3. Perform a search for a similarly titled item that would be available.


    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:hcx:wpaper:9403. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Victor Matheson). General contact details of provider: .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.