Nonoptimal use of nontraditional education

Many universities are implementing nontraditional programs for working adul ts using adjunct, nontraditional faculty as temporary workers. This practic e is defended as economically necessary. However, no economic theory of thi s practice has been developed. In a simple model of private universities wi th two products, traditional and nontraditional education, surplus is maxim ized subject to market demand for traditional and nontraditional education. Tuition and faculty staffing are choice variables. Marketing and library s ervices are fixed at predetermined levels. The results are consistent with conventional price theory: to operate optimally, the firm pays each input t he value of its marginal product, adjusted by the appropriate price elastic ity of demand. If the university is modeled as a firm, traditional educatio n is tuition elastic and nontraditional education is tuition inelastic, the n traditional faculty are optimally paid more than nontraditional faculty o nly when traditional tuition is higher than nontraditional tuition. [JEL Co de: L31] (C) 1999 Elsevier Science Ltd. All rights reserved.