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Welfare effects of subsidizing higher education when access and quality are endogenous

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  • Fethke, Gary
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    Abstract

    Tuition and product quality are determined in cases where subsidies offset inefficiencies. Lower subsidies imply a tradeoff between access and quality. For all quality levels, social welfare increases in the subsidy whenever tuition exceeds the marginal cost.

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    Bibliographic Info

    Article provided by Elsevier in its journal Economics Letters.

    Volume (Year): 112 (2011)
    Issue (Month): 1 (July)
    Pages: 45-48

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    Handle: RePEc:eee:ecolet:v:112:y:2011:i:1:p:45-48

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    Web page: http://www.elsevier.com/locate/ecolet

    Related research

    Keywords: Tuition Quality Subsidy Welfare;

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    1. Lowry, Robert C., 2001. "The effects of state political interests and campus outputs on public university revenues," Economics of Education Review, Elsevier, vol. 20(2), pages 105-119, April.
    2. Jean Tirole, 1988. "The Theory of Industrial Organization," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262200716, December.
    3. Mussa, Michael & Rosen, Sherwin, 1978. "Monopoly and product quality," Journal of Economic Theory, Elsevier, vol. 18(2), pages 301-317, August.
    4. Michael J. Rizzo & Ronald G. Ehrenberg, 2003. "Resident and Nonresident Tuition and Enrollment at Flagship State Universities," NBER Working Papers 9516, National Bureau of Economic Research, Inc.
    5. McDuff, DeForest, 2007. "Quality, tuition, and applications to in-state public colleges," Economics of Education Review, Elsevier, vol. 26(4), pages 433-449, August.
    6. K. Sridhar Moorthy, 1988. "Product and Price Competition in a Duopoly," Marketing Science, INFORMS, vol. 7(2), pages 141-168.
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