Research in Higher Education, Vol. 31, No. 6, 1990 PATH ANALYSIS AND RESIDUAL PLOTTING AS METHODS OF ENVIRONMENTAL SCANNING IN HIGHER EDUCATION" An Illustration with Applications and Enrollments Goktug Morcol and Gerald W. McLaughlin In this study we propose using path analysis and residual plotting as methods supporting environmental scanning in strategic planning for higher education institutions. As an illustration, path models of three levels of independent variables, that is, socioeconomic background, current economic variables, and educational variables, are developed. The dependent variables measuring applications and enrollments at a research university, Virginia Tech, and enrollments at four-year institutions in Virginia are regressed on the independent variables. The residuals from the multiple regression models are plotted on the county maps of Virginia to identify the geographic regions in which the applications and enrollments at Virginia Tech and the enrollments in colleges and universities of Virginia are higher or lower than expected according to the models. The implications of the variables in the models and the geographic distributions of residuals for strategic planning decisions are discussed. Strategic planning efforts in higher education institutions have intensified in the last two decades. The causes of this trend are attributed to the new economic and social environment in which these organizations are operating. There are differing views about the nature and causes of the new environment. It was hypothesized in the 1970s that the enrollments in higher education would suffer from the demographic changes and mainly the declines in the number of 18-year-olds in the population in the 1980s and 1990s (Hoffman, 1980; Barenbaum and Ricci, 1982; Breneman, 1983; Morrell, 1988). Whether the projected declines have materialized or will materialize is a subject of debate. While Chapman (1979); Krohn and Gruttadauria (1985); King, Kobayashi, and Goktug Morcol and Gerald W. McLaughlin, Virginia Polytechnic Institute and State University. Address correspondence to: Dr. Gerald W. McLaughlin, Office of Institutional Research and Planning Analysis, Virginia Polytechnic Institute and State University, Blacksburg, VA 24061. 555 0361-0365/90/1200-0555506.00/0 @ 1990 Human Sciences Press, inc.