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The Competitive Use of Price Discrimination by Colleges

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Author Info
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.

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File URL: http://college.holycross.edu/eej/Volume24/V24N1P99_110.pdf
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Publisher Info
Article provided by Eastern Economic Association in its journal Eastern Economic Journal.

Volume (Year): 24 (1998)
Issue (Month): 1 (Winter)
Pages: 99-110
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Handle: RePEc:eej:eeconj:v:24:y:1998:i:1:p:99-110

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Related research
Keywords: Firm; Firms; Price Discrimination; Tuition;

Find related papers by JEL classification:
I22 - Health, Education, and Welfare - - Education - - - Educational Finance
D43 - Microeconomics - - Market Structure and Pricing - - - 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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