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

The supply of enrollments in higher education has receivedrelatively little attention in both theoretical and empiricaleconomic research. To address this, we formulate and test amodel of the supply of enrollments in higher education inwhich administrators are modeled as utility maximizingbureaucrats. We find evidence that individual presidents andprovosts have a significant effect on enrollment supply andfaculty demand in a panel of eleven public colleges anduniversities in Maryland from 1988 to 1996, implying thatinstitutions have enough market power to permit thepreferences of administrators to influence enrollment supplyand faculty demand.