Estimating tuition elasticities of resident and non-resident enrolments at south-eastern public universities

Due to increased reliance on tuition revenue, universities must be cognizant of the impacts tuition changes have on enrolment. In economics, the law of demand indicates that price increases (tuition) cause quantity demanded (enrolments) to decrease. The impacts of tuition increases on revenue depend on the magnitude of these two changes. The contribution of this article is the methodology used to control for competitor pricing in enrolment elasticity models. For resident enrolment, we included other in-state, 4-year public universities. For non-resident enrolment, we used weighting schemes based on enrolment patterns by school and by state to incorporate competitors’ tuition rates and relevant economic and demographic information. We applied these methodologies to universities in the south-eastern U.S. from 2003 to 2010. We found that tuition elasticities of both resident and non-resident enrolments at 4-year public universities varied from inelastic resident enrolments to elastic non-resident enrolments at the state level. In some cases, competitor pricing significantly impacted enrolments; in other cases, it did not. Across the full sample, 1% increase in resident tuition rates decreased enrolments by 0.3%. The techniques developed in this article can be used by individual universities or university systems to inform their strategies in setting tuition rates.     

高校收费标准与我国居民的支付能力

我国当前高等学校的收费问题,是一个颇受关注的社会问题。就收费标准而言,超过了绝大多数居民的负担能力。为此,提出以下改革建议:科学计算高校运营成本,以人均可支配收入为依据,重新审定并适当降低收费标准,采用略有差别的收费标准,城镇居民不多收,农村学生要少收。     

The determination of public tuition fees in a mixed education system: A majority voting model

We study the determination of public tuition fees through majority voting in a vertical differentiation model where agents' returns on educational investment differ and public and private universities coexist and compete in tuition fees. The private university offers higher educational quality than its competitor, incurring higher unit cost per trained student. The tuition fee for the state university is fixed by majority voting while that for the private follows from profit maximization. Then agents choose to train at the public university or the private one or to remain uneducated. The tax per head adjusts in order to balance the state budget. Because there is a private alternative, preferences for education are not single‐peaked and no single‐crossing condition holds. An equilibrium is shown to exist, which is one of three types: high tuition fee (the “ends” are a majority), low tuition fee (the “middle” is a majority), or mixed (votes tie). The cost structure determines which equilibrium obtains. The equilibrium tuition is either greater (majority at the ends) or smaller (majority at the middle) than the optimal one.     

Post‐secondary attendance by parental income in the U.S. and Canada: Do financial aid policies explain the differences?

We examine the extent to which tuition and needs‐based aid policies explain important differences in the relationship between family income and post‐secondary attendance relationships between Canada and the U.S. Using data from recent cohorts, we estimate substantially smaller attendance gaps by parental income in Canada relative to the U.S., even after controlling for family background, cognitive achievement, and local‐residence fixed effects. We next document that U.S. public tuition and financial aid policies are actually more generous to low‐income youth than are Canadian policies. Equalizing these policies across Canada and the U.S. would likely lead to a greater difference in income‐attendance gradients.     

Can neighbourhoods change the decisions of youth on the margins of university participation?

Abstract This paper uses the Youth in Transition Survey (YITS) to estimate the relationship between neighbourhoods and university participation among Canadian youth. Neighbourhood quality is proxied by the fraction of neighbourhood adults with a Bachelor's degree. The estimated effect is identified using neighbourhood variation within high schools. The paper also tests whether the effects differ by family background and children’s reading skills. Neighbourhoods do not affect university participation among youth drawn from the tails of the socio‐economic distribution. Neighbourhoods have the largest effect on youth drawn from the middle of the socio‐economic distribution who also have above median reading skills.     

Tuition increases Geaux away? Evidence from voting on Louisiana’s amendment 2

In many states, public institutions of higher education have the autonomy to raise tuition. This has not been the case in Louisiana since a 1995 constitutional amendment required a two-thirds majority of the state legislature for any tuition increase. In November of 2016, voters in Louisiana rejected Amendment 2, a constitutional amendment that would have given state institutions of higher education autonomy in setting tuition. We examine parish-level voting on Amendment 2 using an empirical political economy model and find that parishes with a greater percentage of African-Americans and university employees were more likely to vote yes. Student enrolment at public institutions seemingly did not play a role in Amendment 2 losing.     

Income effects and physician labour supply: evidence from the threshold system in Ontario

Abstract. We examine a reform to the physician threshold system in Ontario that provides a unique opportunity to assess the effect of fee changes on physician behaviour, free from the biases that potentially affect simple time‐series or cross‐section inference. We find that: (1) the income effects of fee changes are small, but significant; (2) the income effect dominates the substitution effect only for a minority of services with relatively low prices and high volumes; and (3) the cross effects of fee changes tend to be significant only for services with relatively high prices and low volumes.     

Taxes,Tuition Fees,and Education for Pleasure

The fact that education provides both a productive and a consumptive (nonproductive) return has important and, in some cases, dramatic implications for optimal taxes and tuition fees. Using a simple model, we show that when the consumption share in education is endogenous and tuition fees are unconstrained, the optimal tax/fee system involves regressive income taxes and high tuition fees. A progressive labor income tax system may, on the other hand, be a second‐best response to politically constrained, low tuition fees. Finally, the existence of individuals with different abilities will also move the optimal income tax system toward progressivity.     

Fiscal Competition and Higher Education Spending in Germany

The present paper studies the determinants of higher education spending by the German federal states with a focus on the interplay between higher education spending of neighboring states. More specifically, the paper asks whether the German federal states free‐ride on one another's higher educational spending or whether they employ higher education spending to attract university graduates. We identify a positive relationship between the states' higher education spending and conclude that the states compete for graduates rather than free‐ride. We also consider the effect of the recent introduction of tuition fees in some, but not all German states. We do not find evidence that tuition fees led to crowding out of public higher education funds.     

Tuition Fees for Higher Education and Intergenerational Mobility in China

This paper studies the impact of an increase in higher education tuition on intergenerational mobility in China. We develop a theoretical model for the parental decision about the investment on education of children to illustrate the impact from the perspective of borrowing constraint. We consider the Chinese college tuition and subsidy reform around 1986 as a quasi-natural experiment for identifying the policy effect of the reform on intergenerational educational mobility by using the data from the census of 2000 and the China Family Panel Studies (CFPS). We find that an increase in the education burden induced by the reform of college tuition has reduced intergenerational educational mobility, and it is more noticeable in regions with a relatively higher increment in the tuition fee. Our results are robust with consideration of the co-residence bias, government investment in elementary education, and the higher education expansion.     

贫困大学生的心理健康与培养教育研究

自从1995年中国高校招生并轨制度开始实行,高校收费持续攀高,除极少数专业外,全部是自费上学。由于中国区域经济发展不平衡等原因,部分农村或城市的贫困家庭经济压力沉重,没有能力负担大学生的高额学费,这就形成了中国高校特有的贫困大学生群体。在高等教育迅速发展的过程中,贫困生现象日益突出,并呈逐年迅速上升趋势。由于中国大学生心理健康问题受到了高校的普遍重视,通过对贫困大学生的心理健康状况进行调查分析,对他们的心理现状、心理问题的成因进行调查研究,为解决高校贫困生心理问题提出基本对策。     

基于层次分析法的高等学校学费模型研究

本文分析了影响高等学校学费的众多因素,确定出生均拨款、培养费用、家庭收入和社会资助这四个主要的影响因素,并且基于层次分析法建立了影响因素之间的层次模型。通过构造出成对比较判断矩阵,对矩阵结果进行归一化处理、层次单排序及一致性检验,得到高校学费影响因素在影响程度上的排序,GDP、地区、学校类型和专业对学费的影响较大,而人员经费、设施折旧费和社会资助对学费影响较小。本文结合搜集整理的高校学费标准的相关数据,建立学费的预测模型,对学费标准进行了定量分析。结果表明：2010年学费有所增加,平均学费基本稳于4500元左右,且艺术专业学费最高。     

State appropriations and undergraduate borrowing: more debt,less money

When state appropriations decrease, public universities respond by raising tuition. Students borrow more in response to both tuition increases and appropriation cuts. This article investigates the feedback of how borrowing and tuition influence state appropriations. Using a panel data set of 450 four-year public universities from 1999 to 2012, we employ three-stage least squares techniques to control for the endogeneity between state appropriations, tuition and student borrowing. There is evidence that state policy-makers respond to increases in university tuition and student borrowing by decreasing future appropriation levels. After controlling for the effect of appropriations on tuition and borrowing, a one-dollar increase in student borrowing reduces state appropriations per student by $0.06, and a one-dollar increase in tuition results in a decrease of $0.45 in state appropriations per student. When universities increase tuition for reasons other than a reduction in state appropriations, policy-makers respond with a significant cut in future appropriations which could signal an incentive strategy.     

Rethinking Hecs: Its Definition and Fiscal Role in Compensating for Non-deductibility of Tuition Fees

This paper develops a two period model of the higher education decision to determine the required return from higher education. It uses the model to calculate the proportion of full tuition costs which should be charged 'up front' under the Australian Higher Education Scheme (HECS), in order to compensate for the fact that such fees are not deductible against income for tax purposes. Because full tuition costs represent less than 11 per cent of the total costs of higher education, the ideal HECS ratio is relatively high, in the region of 0.7. The low relative importance of tuition costs means that fee subsidy schemes cannot possibly compensate for other distortions such as income tax progression which persist over the working life of graduates.     

Accounting for the Changing Role of Family Income in Determining College Entry

In this paper, I analyze the determinants of college enrolment and the changes in these determinants over time. I propose a quantitative life‐cycle model with college enrolment. Altruistic parents provide financial support to their children. Using counterfactual experiments, I find that 24 percent of all households are financially constrained in their college decision. Constraints become more severe over time. I show that my model is consistent with a narrow college enrolment gap between students from rich and poor families, as previously reported in the empirical literature. The estimation of enrolment gaps is a popular reduced‐form approach for measuring the fraction of constrained households. My results suggest that these reduced‐form estimates are misleading, and that a structural model of parental transfers is needed to correctly identify constrained households. Further, I show that parental transfers are an important driver behind the changing role of family income as a determinant of college entry, a fact that is well documented for the US economy.     

The impact of cost on the choice of university: evidence from Ontario

Abstract. This paper provides the first Canadian study of the link between cost to the student and the choice of university. Over the past two decades, there has been a substantial increase in the differences among Ontario universities in ‘net cost’ defined as tuition and fees minus the expected value to an academically strong student of a guaranteed merit scholarship. Our estimates generally indicate no relationship between net cost and the overall share of strong applicants that a university is able to attract. An increase in net cost is associated with an increase in the ratio of strong students from high‐income neighbourhoods to strong students from middle‐income and low‐income neighbourhoods in Arts and Science programs but not in Commerce and Engineering. Finally, more advantaged students are more likely to attend university, but merit aid is not of disproportionate benefit to those from more economically advantaged backgrounds, given registration. JEL classification: Health Education and Welfare     

中美高等教育收费与居民经济负担的比较研究

美国作为世界上高等教育最为发达的国家之一,其高等教育收费和成本分担模式以及高等教育资助体系对中国高等教育发展有一定的借鉴意义。中国应根据不同地区经济发展水平和不同收入群体制定区别对待的弹性学费标准,并完善学生资助体系,减轻中国居民的高等教育经济负担,为贫困家庭的子女完成学业提供保障,尽可能地保证高等教育的公平性。     

The Bologna Process and widening participation in university education: new evidence from Italy

This paper extends previous work on the effect of the Bologna reform on university enrolment in Italy. The analysis considers more recent data and also attempts to disentangle the effect of the reform from the influence on enrolment exerted by time-varying confounding factors. The empirical findings consistently show that the “Bologna Process” had a positive impact on university participation, though the magnitude of this impact is smaller than previously concluded. One main reason for our lower estimates lies in the use of a difference-in-differences methodology, which allows us to control for the influence on enrolment exerted by unobserved factors that could have changed coincidentally at the same time as the reform.     

The negative effect of NCAA football bowl bans on university enrolment and applications

Universities provide consumption amenities to students in addition to their educational services. Collegiate sports programs have been characterized as one of these consumption amenities. Previous research has shown that athletic success has a positive impact on both the quantity and quality of students attending a university. Alternatively, we analyse if athletic malfeasance, as measured by NCAA postseason bans of football programs, negatively affects either the quantity or quality of student applications or enrolment. Our findings suggest that athletic malfeasance that results in a postseason football bowl ban lowers the quantity of applications, admittances and enrolment to a university. In addition, we find that universities respond to decreased application numbers by increasing their admission rates, while students who are admitted to the school enrol at the same rate as before the ban. Thus, the reduced enrolment is the result of a smaller applicant pool and not the result of a lower rate of enrolment. Lastly, we do not detect any reduction in student quality at the sanctioned university. Our results demonstrate that impropriety by an athletics program directly impacts a university’s non-athlete student enrolment by influencing the amenity mix provided by the university.     

University fees and the demand for STEM degrees

The 2006 increase in university tuition in the UK was followed by a 3–4% reduction in the proportion of students choosing STEM degrees, due either to a change in the composition of students, or to similar students selecting away from STEM subjects. This article tests the latter hypothesis, estimating the effect of the fees for comparable students using propensity score matching on a rich set of covariates. Results suggest that the change was entirely driven by compositional changes.