The Relationship Between Big-Time College Football and State Appropriations for Higher Education

Brad R. Humphreys

Do big-time college sports affect state appropriations to public colleges and universities? Little attention has been given to the possibility that big-time athletic programs generate economic benefits for a university at the state capital. The paper estimates a reduced form model of the determination of annual state appropriations to public universities, including institution-specific effects to control for unobservable factors like mission and reputation that could affect appropriations. The results suggest that institutions fielding Division I-A football programs receive 8% more in annual state appropriations — about $2.6 million in real 1982 dollars — than those without such programs. Bowl appearances and national rankings do not lead to additional appropriations. These results suggest that the total economic benefit associated with big-time athletic programs may be larger than previously thought and provide insight into why the number of institutions fielding Division I-A college football programs increased by 10% from 1998 to 2002.