Spatial Competition And The Price Of College
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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Bibliographic InfoArticle provided by Western Economic Association International in its journal Economic Inquiry.
Volume (Year): 45 (2007)
Issue (Month): 4 (October)
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Web page: http://www.blackwellpublishing.com/journal.asp?ref=0095-2583
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Find related papers by JEL classification:
- C21 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Cross-Sectional Models; Spatial Models; Treatment Effect Models
- I2 - Health, Education, and Welfare - - Education
- L11 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Production, Pricing, and Market Structure; Size Distribution of Firms
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- Elliott, Caroline & Soo, Kwok Tong, 2013. "The international market for MBA qualifications: The relationship between tuition fees and applications," Economics of Education Review, Elsevier, vol. 34(C), pages 162-174.
- Winters, John V., 2012. "Cohort crowding and nonresident college enrollment," Economics of Education Review, Elsevier, vol. 31(3), pages 30-40.
- Iwata, Shinichiro & Sumita, Kazuto & Fujisawa, Mieko, 2012. "Price competition in the spatial real estate market: Allies or rivals?," MPRA Paper 37438, University Library of Munich, Germany.
- Caroline Elliott & Kwok Tong Soo, 2012. "The International Market for MBA Qualifications," Working Papers 24284581, Lancaster University Management School, Economics Department.
- Cory Koedel, 2009. "Postsecondary Education Structure," Working Papers 0906, Department of Economics, University of Missouri, revised 04 Oct 2010.
- López-Hernández, Fernando A., 2013. "Second-order polynomial spatial error model. Global and local spatial dependence in unemployment in Andalusia," Economic Modelling, Elsevier, vol. 33(C), pages 270-279.
- Elhorst, J. Paul & Lacombe, Donald J. & Piras, Gianfranco, 2012. "On model specification and parameter space definitions in higher order spatial econometric models," Regional Science and Urban Economics, Elsevier, vol. 42(1-2), pages 211-220.
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