Prudent fiscal stewardship: Estimating the expected monetary value of an educational program

Academic administrators are frequently asked to make difficult decisions related to resource allocation. Should a new academic program be approved? Should an old program be discontinued? How should resources be allocated between programs? Although resource allocation decisions are based on many factors, administrators must always consider the financial implications of their decisions. To that end, this paper illustrates one approach that administrators can use to estimate the expected monetary value of their educational programs. The paper begins by providing a brief overview of the relevant cost and revenue factors that are involved in resource allocation decisions. The paper then illustrates how a private, regional university used this approach to estimate the monetary value of an ongoing international education program. The paper concludes with a discussion of the managerial implications associated with making resource allocation decisions based on economic value. Resource allocation, expected monetary value, budget, marketing, accountin