Economic Analysis of Carnegie Mellon University

Abstract

Carnegie Mellon University is a private research institution of higher education that is housed in a city that has undergone, and is still undergoing, the change from a manufacturing hub to a center of knowledge enterprise. Although colleges and universities are part of a local oligopoly, CMU is a global institution which considers its peers to be among the elite institutions, including the University of Pennsylvania, Stanford University, and MIT. Amongst its peers, CMU is on the lower end of the undergraduate student demand spectrum, and it pays its professors significantly less than other great institutions. While CMU is not at risk of low student demand, it faces the same risk of faculty loss to other elite institutions as public institutions face losing their professors to CMU. As a global institution, CMU is affected by exchange rates, and the weak dollar makes a CMU education cheaper to foreign students. However, with the decrease in government funding, CMU, like other higher education institutions, has been forced to look elsewhere for revenue – primarily through tuition increases, private donors, and auxiliary services, to maintain its strong student body, elite faculty, and abundance of resources. While no tentirely shielded from vulnerability, CMU appears to face a sustained future, as long as it is able to continue to adapt to the changing society and economic climate