Revenues and e-learning: do universities need an online presence?

Abstract

In this paper, we examine the role of e-learning enrolments in revenue functions for four-year public universities. Many universities have moved into e-learning as a resource to overcome the funding shortfall which has been an outcome of the recent economic climate. It is hypothesised that an e-learning presence will enhance revenues for universities in varying capacities. We use panel data from the Department of Education and the Southern Regional Education Board, covering the years 2006–2008. We estimate a fixed effects regression to control for unobserved heterogeneity across universities. Results indicate that e-learning enrolment decreases revenue derived from state appropriations. One possible explanation is that traditional universities have found a new revenue outlet in e-learning that decreases the need for state funding. Our results lend support for universities seeking to break away from being a public entity and towards a profit maximising firm.