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University funding systems: impact on research and teaching

Author

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  • Beath, John
  • Poyago-Theotoky, Joanna
  • Ulph, David

Abstract

We address the following question: how does a higher education funding system influence the trade-off that universities make between research and teaching? We do so by constructing a model that allows universities to choose actively the quality of their teaching and research when faced with different funding systems. In particular, we derive the feasible sets that face universities under such systems and show how, as the parameters of the system are varied, the nature of the university system itself changes. The culture of the university system thus becomes endogenous. This makes the model useful for the analysis of reforms in funding and also for international comparisons.

Suggested Citation

  • Beath, John & Poyago-Theotoky, Joanna & Ulph, David, 2011. "University funding systems: impact on research and teaching," Economics Discussion Papers 2011-1, Kiel Institute for the World Economy (IfW).
  • Handle: RePEc:zbw:ifwedp:20111
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    References listed on IDEAS

    as
    1. Gautier, Axel & Wauthy, Xavier, 2007. "Teaching versus research: A multi-tasking approach to multi-department universities," European Economic Review, Elsevier, vol. 51(2), pages 273-295, February.
    2. Geraint Johnes, 2007. "Funding Formulae where Costs Legitimately Differ: The Case of Higher Education in England," Education Economics, Taylor & Francis Journals, vol. 15(4), pages 385-404.
    3. Beath, John & Owen, Robert F. & Poyago-Theotoky, Joanna & Ulph, David, 2003. "Optimal incentives for income-generation in universities: the rule of thumb for the Compton tax," International Journal of Industrial Organization, Elsevier, vol. 21(9), pages 1301-1322, November.
    4. De Fraja, Gianni & Iossa, Elisabetta, 2002. "Competition among Universities and the Emergence of the Elite Institution," Bulletin of Economic Research, Wiley Blackwell, vol. 54(3), pages 275-293, July.
    5. Chapman, Bruce, 1997. "Conceptual Issues and the Australian Experience with Income Contingent Charges for Higher Education," Economic Journal, Royal Economic Society, vol. 107(442), pages 738-751, May.
    6. Borooah, Vani K, 1994. "Modelling Institutional Behaviour: A Microeconomic Analysis of University Management," Public Choice, Springer, vol. 81(1-2), pages 101-124, October.
    7. Lisa Grazzini & Annalisa Luporini & Alessandro Petretto, 2010. "Competition between State Universities," Working Papers - Economics wp2010_02.rdf, Universita' degli Studi di Firenze, Dipartimento di Scienze per l'Economia e l'Impresa.
    8. Robert J. Gary-Bobo & Alain Trannoy, 2005. "Efficient Tuition & Fees, Examinations, and Subsidies," IDEP Working Papers 0501, Institut d'economie publique (IDEP), Marseille, France, revised 01 Mar 2005.
    9. Alexander Kemnitz, 2007. "University Funding Reform, Competition, and Teaching Quality," Journal of Institutional and Theoretical Economics (JITE), Mohr Siebeck, Tübingen, vol. 163(2), pages 356-378, June.
    10. David Greenaway & Michelle Haynes, 2003. "Funding Higher Education in The UK: The Role of Fees and Loans," Economic Journal, Royal Economic Society, vol. 113(485), pages 150-166, February.
    11. Charles T. Clotfelter, 1999. "The Familiar but Curious Economics of Higher Education: Introduction to a Symposium," Journal of Economic Perspectives, American Economic Association, vol. 13(1), pages 3-12, Winter.
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    As found by EconAcademics.org, the blog aggregator for Economics research:
    1. Should universities focus on teaching or research?
      by Economic Logician in Economic Logic on 2011-04-20 19:47:00

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    Cited by:

    1. Stelios Katranidis & Theodore Panagiotidis & Costas Zontanos, 2014. "An Evaluation Of The Greek Universities’ Economics Departments," Bulletin of Economic Research, Wiley Blackwell, pages 173-182.
    2. Marie-Laure Cabon-Dhersin & Jonas Didisse, 2017. "Inter-university competition and high tuition fees," Working Papers halshs-01174291, HAL.
    3. Verbitskiy, Andrey & Fridman, Alla, 2014. "Competition between universities and government regulation," Economic Policy, Russian Presidential Academy of National Economy and Public Administration, pages 137-160, December.

    More about this item

    Keywords

    university funding systems; higher education; research quality; teaching quality; university budget constraint;

    JEL classification:

    • I21 - Health, Education, and Welfare - - Education - - - Analysis of Education
    • I22 - Health, Education, and Welfare - - Education - - - Educational Finance; Financial Aid
    • I23 - Health, Education, and Welfare - - Education - - - Higher Education; Research Institutions

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