University Funding Systems: Impact on Research and Teaching

26 Pages Posted: 17 Feb 2012  

John A. Beath

University of St. Andrews

Joanna Poyago-Theotoky

La Trobe University - School of Economics and Finance; Rimini Center for Economic Analysis

David Ulph

University College London - Department of Economics; Government of the United Kingdom - Inland Revenue

Multiple version iconThere are 2 versions of this paper

Date Written: 2012

Abstract

We address the following question: how does a higher education funding system influence the trade-off that universities make between research and teaching? We do so by constructing a model that allows universities to choose actively the quality of their teaching and research when faced with different funding systems characterised by the pivotal role of the university funding budget constraint. In particular, we derive the feasible sets that face universities under such systems and show how, as the parameters of the system (the research block grant element, the research quality premium and the incentives-triggering quality threshold) are varied, the nature of the university system itself changes. Different 'cultures' of the university system emerge such as the 'research elite' and the 'binary divide.'

Keywords: university funding systems, higher education, research quality, teaching quality, university budget constraint, research elite, binary divide

JEL Classification: I21, I22, I23

Suggested Citation

Beath, John A. and Poyago-Theotoky, Joanna and Ulph, David, University Funding Systems: Impact on Research and Teaching (2012). Economics: The Open-Access, Open-Assessment E-Journal, Vol. 6, 2012-2. Available at SSRN: https://ssrn.com/abstract=2006820 or http://dx.doi.org/10.5018/economics-ejournal.ja.2012-2

John Beath (Contact Author)

University of St. Andrews ( email )

St Salvator's College
St Andrews, Fife, KY16 9AJ
United Kingdom
(+44) (0)1334 462421 (Phone)
(+44) (0)1334 462444 (Fax)

Joanna Poyago-Theotoky

La Trobe University - School of Economics and Finance ( email )

Melbourne, Victoria 3086
Australia

HOME PAGE: http://poyago-theotoky.com

Rimini Center for Economic Analysis ( email )

Via Patara, 3
Rimini (RN), RN 47900
Italy

HOME PAGE: http://poyago-theotoky.com

David Ulph

University College London - Department of Economics ( email )

Gower Street
ESRC Center for Economics Learning and Social Evolution
London WC1E 6BT
United Kingdom
+44 20 7679 5862 (Phone)
+44 20 7916 2774 (Fax)

Government of the United Kingdom - Inland Revenue ( email )

Room F11, West Wing
Somerset House
London WC2R 1LB
United Kingdom
+44 20 7438 7487 (Phone)

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