A Study of the Relationship Between Revenue Sources and Undergraduate Students\u27 Graduation Rates at Public Research Universities

The public\u27s demand for accountability will have a significant impact on research universities\u27 revenue resources in the future. Driving the demand is a perceived lack of institutional productivity. Undergraduate students\u27 graduation rates represent one product of public research universities. States have already latched onto these rates as a measure of institutional performance; and as a result, states have provided a basis for public research universities to use the relationship between dollars invested in the institution and undergraduate students\u27 graduation rates to respond to accountability issues. Current research provides little insight into this relationship. Research in this study uses concepts from the higher education production function, the resource dependency theory, and the Principal-Agent Model to investigate undergraduate students\u27 four-year and six-year graduation rates as an institutional product. The research provides a greater degree of transparency into the relationship between dollars invested in public research universities and undergraduate students\u27 graduation rates than has previously been shown. As a result of this relationship analysis, the research enables the development of a model for predicting undergraduate student graduation rates relative to dollars invested in the institution from different sources