Using Panel Data to Examine Legislative Demand for Higher Education

Robert Toutkoushian and Paula Hollis

Education Economics, 1998, vol. 6, issue 2, 141-157

Abstract: Empirical studies of legislative demand for higher education, using cross-sectional date for all 50 states, have not found much evidence that economic and demographic factors influence state higher education appropriations. This study uses panel data on state appropriations from 1982 through 1996 to examine the sensitivity of the results from the legislative demand model to changes in statistical methodology employed. The results show that the signs and significance levels of variables used in the legislative demand model vary widely when ordinary least squares, fixed effects and two-stage least squares are used. In particular, after controlling for state effects in the panel data, a number of the expected relationships between state appropriations and both economic and demographic factors emerge. There is also some evedence that K-12 education is a significant competing interest group for higher education, and that the legislative demand functions for higher education vary by geographical region and whether funding formulae are used to help determine higher education appropriations.

Date: 1998
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Citations: View citations in EconPapers (8)

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DOI: 10.1080/09645299800000012

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