We present an equilibrium model of the market for higher education. Our model simultaneously predicts student selection into institutions of higher education, financial aid, educational expenditures, and educational outcomes. We show that the model gives rise to a strict hierarchy of colleges that differ by the educational quality provided to the students. We also develop a new estimation procedure that exploits the observed variation in prices within colleges. Identification is based on variation in endowments and technology. It does not rely on observed variation in potentially endogenous characteristics of colleges such as peer quality measures and expenditures. We estimate the structural parameters using data collected by the National Center for Education Statistics and aggregate data from Peterson's and the National Science Foundation. Copyright The Econometric Society 2006.
Download Info
To download:
If you experience problems downloading a file, check if you have the
proper application to
view it first. Information about this may be contained
in the File-Format links below. In case of further problems read
the IDEAS help
page. Note that these files are not on the IDEAS
site. Please be patient as the files may be large.
As the access to this document is restricted, you may want to look for a different version under "Related research" (further below) or search for a different version of it.
Publisher Info
Article provided by Econometric Society in its journal Econometrica.
Cited by: (explanations, Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.)