Document Type

Article

Publication Date

11-25-2011

Keywords

SDBOR, South Dakota public universities, university resources

Abstract

A simulation analysis demonstrates the use of tuition as a policy tool to achieve financial independence among the six South Dakota public universities under University Managed Resources (UMR). The simulation analysis maintains an overall environment of funding stability and is guided by horizontal equity, a concept from the economics of public finance that all entities of the same or similar situation are treated similarly. Financial independence, within the simulation analysis, is defined as an annual budgeting process with no reallocation of financial resources among or between the six universities. For each of the three indicators of horizontal equity simulated, achieving financial independence also realized a convergence of base funding per state-support-tuition student full-time-equivalents (FTE) among the six universities. Applying the economics of public finance concept vertical equity, as a guide to provide rationale for, and explanations of, variation in base funding per state-support-tuition student full-time-equivalent (FTE) among the six public universities, would be a worthwhile follow-up study.

Publisher

Department of Economics, South Dakota State University

Series Number

2011-3

Number of Pages

34

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