NCAA Expenditure and Efficiency: Analyzing Generated and Allocated Revenue in the Football Bowl Subdivision

Abstract

Using a stochastic production function approach and a dynamic panel data estimator, this study creates estimates of time-varying efficiency in the production of generated revenues for NCAA Division I football bowl subdivision athletic programs. These efficiency estimates are then compared to the use of allocated revenues—fees from students and direct payments from the university budget—by college athletic departments. While all schools that are less efficient in the production of generated revenue are shown to use allocated revenue more intensively, a major finding is power-conference schools that are less efficient in their use of expenditure inputs tend to rely more heavily on allocated revenue in the form of student fees to support the activities of the program.