Do states with levels of higher education spending graduate more students? Is the value of the spending observable?

State constituents often scrutinize the spending decision of government officials, putting the representatives of state government in a difficult position; they are pressured to minimize taxpayer burdens while maximizing productivity of the government services provided. Constituents expect to be able to observe value from the tax dollars collected by bureaucrats; however, government service outputs are not always easy to observe. In this study the authors evaluate state government expenditures on higher education. The authors of this study estimate the impact of spending on outcomes such as bachelor degrees conferred and educational attainment. The authors find that spending increases have not displayed a significant impact on bachelor degrees conferred or educational attainment. However, having a larger number of institutions in a state, all else equal, has a significant and positive impact on the number of degrees conferred, independent of enrollment.