An empirical note on the impact of college athletics on tuition revenues

Abstract

The economics and sociology literature has given much attention to the proper role of athletics in the mission of institutions of higher education. This discussion has turned into a debate; one argument holds that athletics fit nicely into the mission of most colleges. However, it has also been argued that athletics impede the students and faculty from achieving their academic potential. We argue that college athletics can increase the demand to attend the institution and lower the price elasticity of demand of non-resident students. This, in turn, increases the level of financial resources available to the institution. We model the percentage of out-of-state students as being dependent upon athletic success (among other variables) and find a positive and significant relationship between the two. In addition, potential net revenue gains from athletic success are provided for specific institutions.