State Appropriation and Higher Education Tuition: What is the relationship?

This paper utilizes a simultaneous equation model to explain the relationship between state appropriation and the level of tuition at higher educational public institutions. Statistical results based on data from 47 continental states of the US indicate that tuition depends upon state appropriation, median family income, out of state enrollment as a percentage of total enrollment, and the region that a particular state is located. Additionally, state appropriation is affected by the level of tuition, per-capita tax revenue, demand factor, 2-year college enrollment as a percentage of total enrollments, and the clear majority of democrats in the state legislature. The results also indicate a clear interdependence of tuition and appropriation at the public institutions in the US.