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The Competitive Use of Price Discrimination by Colleges

Author

Listed:
  • Frederick G. Tiffany

    (Wittenberg University)

  • Jeff A. Ankrom

    (Wittenberg University)

Abstract

In this paper we present a model of colleges as single-product, price-discriminating, output-maximizing firms. Our model predicts that an increase in tuition sticker price, combined with an increase in institutional financial aid grants, will lead to increases in both net revenue and enrollment. Our overall conjecture is that colleges in recent years have made more and better use of price-discrimination as a response to increasing competitive pressure. Based on simple econometric tests, we conclude that the 1991-95 period of increasing sticker price, aid, enrollment and net revenue is consistent with our model.

Suggested Citation

  • Frederick G. Tiffany & Jeff A. Ankrom, 1998. "The Competitive Use of Price Discrimination by Colleges," Eastern Economic Journal, Eastern Economic Association, vol. 24(1), pages 99-110, Winter.
    • Handle: RePEc:eej:eeconj:v:24:y:1998:i:1:p:99-110
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    File URL: http://web.holycross.edu/RePEc/eej/Archive/eeconj/Volume24/V24N1P99_110.pdf
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    Citations

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    Cited by:

    1. Peter K. Hazlett & Chandler S. Reilly, 2023. "Bureaucratic rent creation: the case of price discrimination in the market for postsecondary education," Constitutional Political Economy, Springer, vol. 34(2), pages 226-256, June.

    More about this item

    Keywords

    Firm; Firms; Price Discrimination; Tuition;
    All these keywords.

    JEL classification:

    • I22 - Health, Education, and Welfare - - Education - - - Educational Finance; Financial Aid
    • D43 - Microeconomics - - Market Structure, Pricing, and Design - - - Oligopoly and Other Forms of Market Imperfection
    • L13 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Oligopoly and Other Imperfect Markets

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