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.     

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.     

Aid and public sector fiscal behaviour in failing states

This paper looks at interactions between foreign aid and the public sector in developing countries, especially those considered to be fragile or failing states. A model is proposed which employs actual budgetary appropriations and revenue estimates (rather than estimated target variables) and allows for asymmetric preferences. Variants of the model are estimated using time-series data for Papua New Guinea (PNG). PNG is classified as a fragile state by the international community owing to perceived policy and institutional inadequacies. Results obtained suggest that foreign aid increases consumption and investment expenditures and decreases tax revenues and the level of borrowing.     

Competition between private and public schools: testing stratification and pricing predictions

When there are peer effects in education, private schools have an incentive to vary tuition to attract relatively able students. Epple and Romano [American Economic Review 88(1) (1998) 33] develop a general equilibrium model characterizing equilibrium pricing and student selection into schools when peer effects are present. The model predicts that competition will lead private schools to give tuition discounts to more able students, and that this will give rise to an equilibrium exhibiting stratification by income and ability between the public and private sectors and to a hierarchy of schools within the private sector. The model also yields a variety of comparative-static predictions. The predictions of the model are tested in this paper using a unique data set assembled by Figlio and Stone [Research in Labor Economics (1999) 115]. Tests of equilibrium predictions of the model reveal that: The propensity to attend private school increases with both income and ability, and, among private schools, the propensity to attend the highest-tuition schools rises with both income and ability. Within private schools, tuition declines with student ability, with a substantial number of even high-income households paying little or no tuition. The correlation between income and ability is greater in public than private schools. Tests of comparative static predictions of the model reveal that: Both income and ability become stronger predictors of private school attendance as public school expenditure falls. Income becomes increasingly important in determining placement in the private school hierarchy as public school expenditure falls. Discounts to ability in the lowest-quality private school decline as public school expenditure rises while discounts to ability in the highest-quality private school are little affected by changes in public school expenditure. Expenditure in private schools rises as expenditure in public schools increases. These empirical results are consistent with the predictions of the theoretical model.     

论公办高校教师养老保险待遇改革的制度取向——基于权威统计数据的分析

公办高校教师养老保险改革的制度设计,比较突出的取向,就是把公办高校教师与义务教育教师和公务员区别开来。公办高校经费公用部分支出与义务教育的比较,公办高校的学费标准、生均教育经费支出和教工工资水平的统计数据,相关组织的投入产出即绩效的比较分析,表明公办高校与义务教育和政府机关具有相当的公益性。因此,公办高校教师的养老保险待遇应该与公务员相同。     

Cohort crowding: How resources affect collegiate attainment

Analyses of college attainment typically focus on factors affecting enrollment demand, including the financial attractiveness of a college education and the availability of financial aid, while implicitly assuming that resources available per student on the supply-side of the market are elastically supplied. The higher education market in the United States is dominated by public and non-profit production, and colleges and universities receive considerable subsidies from state, federal, and private sources. Because consumers pay only a fraction of the cost of production, changes in demand are unlikely to be accommodated fully by colleges and universities without commensurate increases in non-tuition revenue. For this reason, public investment in higher education plays a crucial role in determining the degrees produced and the supply of college-educated workers to the labor market. Using data covering the last half of the twentieth century, we find strong evidence that large cohorts within states have relatively low undergraduate degree attainment, reflecting less than perfect elasticity of supply in the higher education market. That large cohorts receive lower public subsidies per student in higher education explains this result, indicating that resources have large effects on degree production. Our results suggest that reduced resources per student following from rising cohort size and lower state expenditures are likely to have significant negative effects on the supply of college-educated workers entering the labor market.     

Measuring the effects of preservation on farm profits in a continuous treatment setting

Despite billions of dollars of public appropriations to state purchase of development rights (PDR) programmes, there has been limited evaluation of the effects of these investments on the economic performance of preserved farms. This article estimates dose-response functions to evaluate the effects of enrolment in New Jersey’s PDR programme on farm profitability. The generalized propensity score method in a continuous treatment setting is used to address selection bias arising from voluntary programme participation. Treatment effects are measured across treatment levels to determine whether farm profitability is affected differently across levels of programme participation. Our findings reveal that, relative to unpreserved farms, profit per acre tends to increase along lower treatment levels. The profit per acre of preserved farms in the 1–40% treatment range is, on average, $407 higher than that of unpreserved farms in the full sample. Positive profit differentials averaging between $317 and $472 per acre are also observed in the 1–20%, 1–40% and 1–60% treatment quintiles in the farming occupation sample. We do not observe statistically significant profitability differentials when treatment effects are averaged across all positive treatment values.     

State politics,tuition, and the dynamics of a political budget cycle

This paper attempts to improve the understanding of political budget cycles by first identifying a previously undocumented cycle in tuition and required fees at public four-year institutions of higher education in the United States. I find that tuition and fees are 1.5 % lower during gubernatorial election years than in non-election years. No similar cycle is found in private tuition and fees. Using a newly constructed dataset, I then explore the variation in electoral competition in gubernatorial and state legislative elections within states over time to uncover the underlying electoral incentives creating the cycle. The results suggest that the tuition cycle is not designed to increase the reelection prospects of governors as standard theories would predict. I find that tuition decreases during gubernatorial election years as the reelection prospects of the incumbent governor increases. Instead, the evidence suggests that popular governors use lower tuition as political pork to expand party power in the state by capturing swing districts in concurrent state legislative elections. I find that the magnitude of the cycle increases with the level of competition in state house elections and that the effect is concentrated among those districts held by the opposition party, particularly if those opposition districts are populated with voters likely to be responsive to tuition as a policy lever. These results reveal important dynamics about party competition within states in the United States and suggest that the electoral incentives driving political budget cycles can be complex.     

Is firm-sponsored training a palliative? A common agency approach

We analyse the issue of firm-sponsored training under product market imperfections. In this setting, qualification becomes a public good for firms when their profits are increasing in the stock of skilled workers but remains a private good to students/workers. Students have to pay a tuition fee but at the same time firms sponsor education: universities sell training to both. We prove that the proportion of skilled workers is larger in more competitive economies/industries while the share of firms in the financing of training is a monotonically decreasing function of the degree of competition. An increase of the latter indeed increases the equilibrium skilled wage while reducing its sensitivity to an increase of the supply of skilled workers. The firms’ aggregate expenditures on training per worker are nevertheless a nonmonotonic function of the competitiveness of the economy.     

Pay for play: the financial value of NCAA football players

We explore the financial value of National Collegiate Athletic Association (NCAA) football recruits and establish a wage schedule based on the star ratings assigned to high school athletes by an independent talent evaluation agency. Evidence suggests that the contribution of higher-ranking recruits to team wins significantly increases revenues. While the NCAA currently prohibits universities from paying student-athletes, we estimate that if amateurism rules were rescinded and college football players were compensated according to their revenue-generating abilities then five-, four-, three-, and low-star players would be entitled to annual salaries of $799,000, $361,000, $29,000, and $21,000, respectively, in addition to athletic scholarships covering tuition, books, and room and board.     

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.     

Monetary policy effects: new evidence from the Italian flow-of-funds

New evidence on the transmission of monetary policy to the economy is provided through an analysis of the effects of a restrictive monetary policy shock on Italian flow of funds over the period 1980 to 2002. Firms reduce issuance of debt and decrease the acquisition of financial assets, providing no support for the existence of strong financial frictions. Following the shock, in the first quarter households increase short-tem liabilities and diminish the acquisition of liquid assets and shares. The public sector increases net borrowing during the first 2 years. Financial corporations decrease their borrowing for three quarters while in the same period the foreign sector increases borrowed funds. We claim that our results shed new light on the role of the financial decisions of the economic sectors in the transmission mechanism of monetary policy.     

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。     

Educational opportunity and income inequality

Affordable higher education is, and has been, a key element of social policy in the United States with broad bipartisan support. Financial aid has substantially increased the number of people who complete university—generally thought to be a good thing. We show, however, that making education more affordable can increase income inequality. The mechanism that drives our results is a combination of credit constraints and the ‘signaling’ role of education first explored by Spence [Spence, A. Michael, 1973. Job Market Signalling, Quarterly Journal of Economics, 87(3) Aug., 355–374]. When borrowing for education is difficult, lack of a college education could mean that one is either of low ability or of high ability but with low financial resources. When government programs make borrowing or lower tuition more affordable, high-ability persons become educated and leave the uneducated pool, driving down the wage for unskilled workers and raising the skill premium.     

International migration and the welfare state revisited

Immigration is a controversial topic in most developed economies. The presence of a redistributive welfare state in all major immigrant host countries creates a margin on which immigration affects native welfare. The primary focus of the paper is whether a large intake of immigrants reduces welfare state effort. It is usually argued that steady increases in immigration lead to public pressure for lower levels of publicly-funded social expenditures. In contrastz to the earlier empirical literature on this topic, we find little evidence in favour of this hypothesis. While immigration does have a relatively modest effect on the welfare state, if anything there is some support for the view that a greater influx of immigrants has lead policy-makers to increase welfare state spending.     

EDUCATIONAL VOUCHERS AND CREAM SKIMMING*

Epple and Romano (1998) show equilibrium provision of education by public and private schools has the latter skim off the wealthiest and most‐able students, and universal vouchers lead to further cream skimming. Here we study voucher design that injects private‐school competition and increases technical efficiencies without cream skimming. Conditioning vouchers on student ability without restriction on participating schools' policies fails to affect significantly cream skimming. However, by adding restrictions like tuition constraints, such vouchers can reap the benefits of school competition without increased stratification. This is accomplished while allowing voluntary participation in the voucher system and without tax increases.     

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     

The Impact of Public Health Spending on California STD Rates

This study assesses the impact of county-level public health spending on rates of sexually transmitted disease (STD) in California. Across a variety of empirical specifications, increases in own-county public health spending reduce rates of gonorrhea and syphilis. Indeed, a $1 increase in per capita public health spending reduces the gonorrhea (syphilis) rate by approximately 0.30 (0.60) percent. Spillover effects are also associated with public health spending, as increases in border-county spending reduce STD rates. To varying degrees of significance, county STD rates are also sensitive to lagged STD rates, county racial composition, whether or not a public university is located within the county, and a yearly time trend.     

INVESTMENT IN PRIMARY, SECONDARY, AND HIGHER EDUCATION AND THE EFFECTS ON ECONOMIC GROWTH

This author analyzes the effects of primary, secondary, and higher education on per capita growth for flow measures of education: enrollment rates, public expenditures, and expenditures per student. Worldwide panels since 1960 and developing and developed country subsamples are examined. Secondary and higher education enrollment rates and expenditures per student in lower education stages and primary overall demonstrate significance. Public higher education expenditures overall and per student are disadvantageous. This study recommends raising enrollment rates and prioritizing public expenditures toward lower education stages, while ensuring that expenditures per student keep up with increases in student cohorts. Indirect effects of education are explored. (JEL O11 , H52 , I28 )