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Testing sensitivity of student enrollment with respect to tuition at an institution of higher education

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  • Bijan Vasigh
  • Reza Hamzaee

Abstract

This study was conducted to measure the impact of H-University's (HU's) tuition increases on enrollment. Based on an internal survey, this study attempts to explain the sensitivity of student enrollment to tuition variations. In addition, this paper develops an aggregate enrollment model and uses the common economic variables such as tuition, income, wage rates, financial aids, and unemployment rates to explain the sensitivity of demand. The most significant finding of this study is that tuition consideration seems to have a relatively small effect on students' decisions. Actually, enrollment at HU (a private institution) have increased despite higher tuition rate. Possible justifications could be proposed, such as the necessity of higher education and the fact that higher education is a continued investment in human capital, in which the more relevant decision factor is the corresponding expected rate of return and not just the cost of investment. Copyright International Atlantic Economic Society 2004

Suggested Citation

  • Bijan Vasigh & Reza Hamzaee, 2004. "Testing sensitivity of student enrollment with respect to tuition at an institution of higher education," International Advances in Economic Research, Springer;International Atlantic Economic Society, vol. 10(2), pages 133-149, May.
    • Handle: RePEc:kap:iaecre:v:10:y:2004:i:2:p:133-149:10.1007/bf02295676
    DOI: 10.1007/BF02295676
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    References listed on IDEAS

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    1. Donald E. Heller, 1997. "Student Price Response in Higher Education," The Journal of Higher Education, Taylor & Francis Journals, vol. 68(6), pages 624-659, November.
    2. Yu Hsing & Hui S. Chang, 1996. "Testing Increasing Sensitivity of Enrollment at Private Institutions to Tuition and other Costs," The American Economist, Sage Publications, vol. 40(1), pages 40-45, March.
    3. Radner, Roy & Miller, L S, 1970. "Demand and Supply in U. S. Higher Education: A Progress Report," American Economic Review, American Economic Association, vol. 60(2), pages 326-334, May.
    4. Arthur J. Corazzini & Dennis J. Dugan & Henry G. Grabowski, 1972. "Determinants and Distributional Aspects of Enrollment in U.S. Higher Education," Journal of Human Resources, University of Wisconsin Press, vol. 7(1), pages 39-59.
    5. Galper, Harvey & Dunn, Robert M, Jr, 1969. "A Short-Run Demand Function for Higher Education in the United States," Journal of Political Economy, University of Chicago Press, vol. 77(5), pages 765-777, Sept./Oct.
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    Cited by:

    1. repec:kap:iaecre:v:11:y:2005:i:2:p:215-229 is not listed on IDEAS
    2. Reza Hamzaee, 2005. "A Survey and a Theoretical Model of Distance Education Programs," International Advances in Economic Research, Springer;International Atlantic Economic Society, vol. 11(2), pages 215-229, May.
    3. Semjén, András, 2012. "A tandíj közgazdaságtana [The economics of tuition fees]," Közgazdasági Szemle (Economic Review - monthly of the Hungarian Academy of Sciences), Közgazdasági Szemle Alapítvány (Economic Review Foundation), vol. 0(1), pages 31-62.

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