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The Review of Higher Education 25.1 (2001) 39-61

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Do Institutional Characteristics Affect Student Gains from College?

Robert K. Toutkoushian and John C. Smart


Academics have long striven to better understand how colleges affect students and whether student gains during their undergraduate careers are influenced by specific characteristics of students and their respective institutions. As Pascarella (1991) noted, "The impact of college on students forms, perhaps, the single largest base of empirical investigations in higher education" [End Page 39] (p. 455). 1 The interest of campus administrators in the topic has certainly been heightened in recent years by increased calls from stakeholders for accountability and cost efficiency in higher education. While some institutional characteristics are beyond an administrator's control, such as public vs. private status, they can influence other institutionalcharacteristics such as the size, selectivity, mission, and level of expenditures.

Academics argue that an institution's characteristics should have an influence on different aspects of student gains. Tinto (1975) asserts that institutional characteristics contribute to student retention since an institution's resources place limits on student development and integration. Economists likewise predict that an institution's characteristics affect student gains in muchthe same way that a firm's characteristics (e.g., size, quantity of inputs used in production) influence the quality of its products/services. Obviously, institutions with more financial resources can hire better faculty, expand their libraries, and purchase more and better computer equipment for students andfaculty. Others argue that priorities of allocation can affect student gains, sincesome of the ways institutions use financial resources (e.g., instruction) may be more closely related to student learning than others (e.g., administration). 2

Unfortunately, the empirical evidence to date offers little guidance for administrators. While Solmon and Wachtel (1975), Wachtel (1976), and Bowen (1977) found that institutional characteristics do matter, the majority of studies that have considered the topic conclude that institutional effects contribute little, if anything, to student growth after controlling for student background and acquired characteristics. 3 Studies by Hanushek (1972), Rock, Centra, and Linn (1970), Rock, Baird, and Linn (1972), James, Alsalam, Conaty, and To (1989), and James and Alsalam (1993) do not support the concept that "money matters." Rather, their specific findings are consistent with Pascarella and Terenzini's (1991) overall conclusion that institutional characteristics such as size, type of control, curricular emphasis, and selectivity "are simply not linked with major differences in net impacts on students" (p. 589; emphasis theirs). [End Page 40]

Determining whether institutional characteristics influence student gains isnot only important in its own right for finding ways to help students, but alsofor critiquing the usefulness of "performance indicators" of higher education institutions. Recent years have seen rising interest among many legislatures, college administrators, and other education stakeholders in using quantitative measures of institutional characteristics to monitor and evaluate colleges and universities (e.g., Taylor & Massy, 1996). The choice of indicators israrely based on any evidence that they actually do affect educational outcomes;thus, such studies may not offer clear policy prescriptions for administrators. 4 Some agencies have gone further and use these indicators to rate institutions (McDonough et al., 1998). Most notably, U.S. News and World Report bases its measure of "academic excellence" on such institutional characteristics as selectivity, retention, student-faculty ratio, and expenditures per student. In this study, we use data about a national sample of students to investigate whether expenditures per student affect students' self-perceived gains. The data, compiled by the Higher Education Research Institute (HERI) at UCLA, began with a cohort of first-year students in 1986 and a follow-up survey in 1990; the information includes students' background characteristics, their activities and accomplishments during college, and their self-assessments of gains in a variety of areas. We focus specifically on gains in five areas that correspond to objectives common to students and their respective institutions: interpersonal skills, learning/knowledge, tolerance/awareness, graduate/professional school preparation, and communication skills.

The unique aspect of this study is its combination of student-level data with institution-level data for...


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