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ERIC Number: ED017991
Record Type: RIE
Publication Date: 1966-Aug
Pages: 33
Abstractor: N/A
Reference Count: 0
ISBN: N/A
ISSN: N/A
TOWARDS A THEORY OF THE EDUCATIONAL FIRM.
SIEGEL, BARRY N.
THIS PAPER DEVELOPS AN ECONOMIC THEORY OF INSTITUTIONS OF HIGHER EDUCATION (IHE) FROM WHICH IT MIGHT BE POSSIBLE TO EXTRACT A THEORY OF ENROLLMENT SUPPLY. SUCH A THEORY MUST DIFFER RADICALLY FROM THE THEORY OF THE BUSINESS FIRM BECAUSE OF TWO KEY ASSUMPTIONS WHICH CANNOT BE MADE ABOUT THE IHE--PROFIT MAXIMIZATION AND A PRODUCTION FUNCTION WHICH FORCES UPON THE FIRM A CONDITION OF RISING MARGINAL COST. THEREFORE, AN ALTERNATIVE APPROACH TO DESCRIBE THE "MODUS OPERANDI" FOR THE IHE IS DEVELOPED. TWO APPROACHES ARE TRIED USING A RULE-OF-THUMB BEHAVIOR ASSUMPTION AND AN OUTLAY MAXIMIZATION ASSUMPTION, BUT NEITHER PRODUCES SATISFACTORY RESULTS. COMBINATION OF THE TWO PRODUCES SATISFACTORY RESULTS. THIS COMPROMISE IS EMBODIED IN THE UTILITY FUNCTION--U = V(OUTLAYS, ENROLLMENT). FROM THIS UTILITY FUNCTION, A SUPPLY FUNCTION FOR THE IHE IS DERIVED. USING THIS SUPPLY FUNCTION AND A LINEAR DEMAND FUNCTION, NONPRICE RATIONING, THE ECONOMICS OF SCHOLARSHIPS, AND IMPLICATIONS OF PRICE CONTROL ARE DISCUSSED. THIS PAPER WAS PRESENTED TO THE ANNUAL MEETING OF THE WESTERN ECONOMIC ASSOCIATION (BERKELEY, CALIFORNIA, AUGUST, 1966), AND IS ALSO AVAILABLE FOR $0.25 FROM PUBLICATIONS DEPARTMENT, CENTER FOR THE ADVANCED STUDY OF EDUCATIONAL ADMINISTRATION, HENDRICKS HALL, UNIVERSITY OF OREGON, EUGENE, OREGON 97403. (HW)
Publication Type: N/A
Education Level: N/A
Audience: N/A
Language: N/A
Sponsor: N/A
Authoring Institution: Oregon Univ., Eugene. Center for Advanced Study of Educational Administration.
Identifiers: California (Berkeley); Oregon (Eugene)