We build a model of universities combining their real production decisions with their choice of endowment size and asset allocation. Variation in opportunity cost, that is, the productivity of internal projects, has a first-order effect on these choices. Adding the UPMIFA-mandated 7% payout...

This book is an important addition to the emerging body of new work on capital. Its primary contribution is in analysing capital investment choice as a process. The understanding of this process requires some modification and significant extension to the standard neo-classical economic tools....