A Simulation Model of the Higher Education System of a State1

Abstract This paper describes a simulation model to estimate the enrollments and expenditures associated with various policy alternatives for the post‐secondary education system of a state, with Indiana as an example. Enrollments, operating expenditures, and construction costs are predicted for every public and private school for each year until 1985. The basic model‐building technique employed is regression analysis on historical data, but it is supplemented by other quantitative techniques and by experts' predictions. The model may be used to predict “most likely” future enrollments and costs, to perform sensitivity analyses to better understand the impact of various exogenous variables upon the system, and to evaluate possible policy alternatives. Including all of the schools in a state makes possible the evaluation of policy alternatives such as possible configurations of new two‐year public schools, the effect of tuition changes, and the effect of enrollment ceilings for larger state universities.