The Supply of University Enrollments: University Administrators as Utility Maximizing Bureaucrats

The supply of enrollments in higher education has received relatively little attention in both theoretical and empirical economic research. To address this, we formulate and test a model of the supply of enrollments in higher education in which administrators are modeled as utility maximizing bureaucrats. We find evidence that individual presidents and provosts have a significant effect on enrollment supply and faculty demand in a panel of eleven public colleges and universities in Maryland from 1988 to 1996, implying that institutions have enough market power to permit the preferences of administrators to influence enrollment supply and faculty demand. ∗Kathleen Carroll and participants in sessions at the 1998 Southern Economic Association meetings and the 1999 Public Choice meetings provided helpful comments and suggestions. All remaining errors are our own. We thank Nicole Myers and Ryan Mutter for able research assistance.