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Involuntary and Voluntary Cost Increases in Private Research Universities

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We consider involuntary and voluntary cost increases in Carnegie I and II private research universities, where we find that voluntary cost increases are over three times as high as involuntary cost increases. As is the case with public research universities, private universities economized on the use of tenure track faculty and non-professional staff, while they invested heavily in more executive/managerial and professional staff from 1987 to 2008. Also as is the case with public research universities, private universities began across the board cost reductions by reducing all staff/student ratios and shifted resources out of overhead and into academic spending from 2008 to 2011. Further, the privates accelerated their cost saving use of faculty and non-professional staff relative to the reductions in executive/managerial and professional staff such that the ratio of tenure track faculty to full time nonacademic professional staff continued to decline.

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  • R. Carter Hill & Robert Martin, 2013. "Involuntary and Voluntary Cost Increases in Private Research Universities," Departmental Working Papers 2013-05, Department of Economics, Louisiana State University.
  • Handle: RePEc:lsu:lsuwpp:2013-05
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    File URL: https://www.lsu.edu/business/economics/files/workingpapers/pap13_05.pdf
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    1. Jeffrey M Wooldridge, 2010. "Econometric Analysis of Cross Section and Panel Data," MIT Press Books, The MIT Press, edition 2, volume 1, number 0262232588, December.
    2. R. Carter Hill & Robert Martin, 2012. "Measuring Baumol and Bowen Effects in Public Research Universities," Departmental Working Papers 2012-05, Department of Economics, Louisiana State University.
    3. Chamberlain, Gary, 1982. "Multivariate regression models for panel data," Journal of Econometrics, Elsevier, vol. 18(1), pages 5-46, January.
    4. A. Colin Cameron & Pravin K. Trivedi, 2010. "Microeconometrics Using Stata, Revised Edition," Stata Press books, StataCorp LP, number musr, March.
    5. Robert E. Martin, 2011. "The College Cost Disease," Books, Edward Elgar Publishing, number 14179.
    6. George A. Akerlof, 1970. "The Market for "Lemons": Quality Uncertainty and the Market Mechanism," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 84(3), pages 488-500.
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    1. Robert Martin, 2013. "Do Colleges and Universities "Manage" Their Financial Reporting?," Challenge, Taylor & Francis Journals, vol. 56(5), pages 85-99.
    2. Kelchen, Robert, 2019. "An empirical examination of the Bennett hypothesis in law school prices," Economics of Education Review, Elsevier, vol. 73(C).

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