Relevance Of Utility Maximization In Student University Choice – A Consumption-Based Model For Higher Education
AbstractThis paper applies a model of utility-maximization to better understand the university choice process. Student decision-making for university choice is conceptualized as a purchase decision process through which students weigh the costs of colleges or universities they choose against their perceived benefits of attending these institutions. The key issues are the impact of consumer’s preferences, income, tuition, and costs in college decision-making. From this perspective, the paper describes the relationship between utility maximization and educational demand, effects of tuition increases, tuition discounting, and financial aid subsidies on university choice. A decision-making scheme for educational consumption is used in order to identify the stages of the university choice process and to predict the behavior of consumers in the higher education marketplace. The analysis points to the need to better inform students about the cost of postsecondary education which is a highly relevant aspect in the university choice process.
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Bibliographic InfoArticle provided by Alexandru Ioan Cuza University, Faculty of Economics and Business Administration in its journal Review of Economic and Business Studies.
Volume (Year): (2011)
Issue (Month): 7 (May)
College choice; consumer behavior; higher education; human capital; student-choice model;
Find related papers by JEL classification:
- A12 - General Economics and Teaching - - General Economics - - - Relation of Economics to Other Disciplines
- D01 - Microeconomics - - General - - - Microeconomic Behavior: Underlying Principles
- D11 - Microeconomics - - Household Behavior - - - Consumer Economics: Theory
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"Modeling College Major Choices Using Elicited Measures of Expectations and Counterfactuals,"
10-30, Duke University, Department of Economics.
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- Arcidiacono, Peter & Hotz, V. Joseph & Kang, Songman, 2010. "Modeling College Major Choices Using Elicited Measures of Expectations and Counterfactuals," IZA Discussion Papers 4738, Institute for the Study of Labor (IZA).
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- Gary S. Becker, 1962. "Investment in Human Capital: A Theoretical Analysis," Journal of Political Economy, University of Chicago Press, vol. 70, pages 9.
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