Emerging Tier-One Institutions: Examining the Impact of the Texas Research Incentive Program on University Revenues

• In Event: The Carrots, Sticks, and Unintended Consequences of State Higher Education Policy

Abstract

This study examines the impact of the Texas Research Incentive Program (TRIP), a state policy that incentivizes private-sector donations to certain public universities by offering matching funds. We use a national dataset and employ a generalized difference-in-differences approach paired with matching procedures to estimate the average treatment effect of TRIP on revenues at eligible institutions. Results show that TRIP is associated with an increase in revenue from private gifts between 52.9% and 78.2%, suggesting state policymakers can incentivize university donations. However, we do not detect a significant relationship between TRIP and state contracts/grants (a category that includes TRIP state-matching funds). Finally, donations are likely used for short-term funding and do not contribute to long-term endowments.

Authors

• Xiaodan Hu, Northern Illinois University

• Frank Fernandez, University of Florida

• Denisa Gandara, The University of Texas - Austin