University Funding Policies: Buildings or Citizens?

Governments fund public universities based on the number of registered students and lump sum transfers. Such policy induces universities to compete for student recruitment. I show that such rule can lead to an inefficient allocation of resources in which universities compete for the same students. I suggest a more efficient policy that achieves the social optimum for any given level of funding. Such funding rule should not be solely based on university’s own enrolement, but also on enrolment in competing universities.


Issue Date:
2013-01
Publication Type:
Working or Discussion Paper
DOI and Other Identifiers:
Record Identifier:
https://ageconsearch.umn.edu/record/274622
Language:
English
Total Pages:
24
JEL Codes:
H52; I23; I28
Series Statement:
Working Paper No. 1302




 Record created 2018-06-27, last modified 2020-10-28

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