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Spatial Competition And The Price Of College

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Author Info
DANIEL P. McMILLEN
LARRY D. SINGELL
GLEN R. WADDELL

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Abstract

"This article provides the first evidence that universities compete directly on price, and that the market for students depends on the proximity of competitors. Exploiting detailed data from private U.S. universities, price competition is tested by introducing geographic proximity into a spatial-autoregressive tuition model. Standard spatial models show that list and net tuition are inversely related to distance between institutions, consistent with price competition in higher education. An extension to the spatial-econometrics literature relaxes a constraint that estimated spatial relationships are common across all observations, implying that spatial effects differ across qualitative classes of institutions". ("JEL "C21, I2, L11) Copyright 2007 Western Economic Association International.

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File URL: http://www.blackwell-synergy.com/doi/abs/10.1111/j.1465-7295.2007.00049.x
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Publisher Info
Article provided by Western Economic Association International in its journal Economic Inquiry.

Volume (Year): 45 (2007)
Issue (Month): 4 (October)
Pages: 817-833
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Handle: RePEc:bla:ecinqu:v:45:y:2007:i:4:p:817-833

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  1. repec:bep:eaptop:v:7:y:2007:i:1:p:1605-1605 is not listed on IDEAS
  2. Cory Koedel, 2009. "Postsecondary Education Structure," Working Papers 0906, Department of Economics, University of Missouri. [Downloadable!]
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