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The Sensitivity of Capital Use to Price in Higher Education

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Abstract

We test whether U.S. colleges and universities adjust their physical capital intensity to differences in factor prices by regressing the square feet of space per student on construction prices across institutions. The results indicate that physical space at selective liberal arts colleges and private comprehensive universities is unresponsive to relative factor prices but do reflect differences in institutional wealth. At public comprehensive universities and two-year colleges the evidence suggests that students enjoy more space per student where building costs are lower.

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References

  • Clotfelter, Charles, Ronald Ehrenberg, Malcolm Getz and John Siegfried (1991) EconomicChallenges in Higher Education. Chicago: University of Chicago Press.

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Authors and Affiliations

  1. Department of Economics, Vanderbilt University, Nashville, TN, 37235-1819, USA

    Malcolm Getz & John J. Siegfried

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  1. Malcolm Getz
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  2. John J. Siegfried
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Getz, M., Siegfried, J.J. The Sensitivity of Capital Use to Price in Higher Education. Review of Industrial Organization 24, 379–391 (2004). https://doi.org/10.1023/B:REIO.0000037535.11644.2c

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  • DOI: https://doi.org/10.1023/B:REIO.0000037535.11644.2c

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