This dissertation proposes to explain differences in resource allocation and pricing policies within state and private universities, as well as within associated auxiliary health clinic enterprises.

Economic theory predicts that managers within state universities will choose to spend relatively more of the university's scarce resources on non-educational goods and services and relatively less on educational services than will managers within private universities. Theory also predicts that private universities will tend to explicitly price goods and services more extensively than will state universities. Private universities will price auxiliary services closer to marginal cost than will state universities, meaning resource dissipation and welfare losses will be less within private universities and greater within state universities.

Theoretical implications are tested at two levels: (1) the university as a whole, and (2) auxiliary health clinic enterprises. Empirical support is found for all tested propositions at both the university and auxiliary health clinic level.