Abstract
This study investigates the factors to continue three years to decrease their education and research expense in Japanese private colleges and universities. Previous research does not conclude the best factor to decrease service efforts or costs in nonprofit sector （Tuckman and Chang 1991; Greenlee and Trussel 2001）. In this study, I test the relationship between the private colleges and universities which continue three years to decrease their education and research expenses, and profit indicator of them because I assume that profits affect their service efforts or costs. As the results of the data from 2008 to 2010, I find evidence that if private colleges and universities report less profits or losses, they are more likely to continue three years to decrease their education and research expenses. This result indicates that profit indicator in private colleges and universities is useful for accounting information users to predict their future service efforts or costs.
