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Does the Format of a Financial Aid Program Matter? The Effect of State In-Kind Tuition Subsidies

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  • Bridget Terry Long

    (Harvard University, Graduate School of Education, and NBER)

Abstract

This paper examines the importance of format in aid programs, focusing on state appropriations to public postsecondary institutions. These funds subsidize costs for in-state students, but they may also influence choices between institutions due to their in-kind format. Using the conditional logistic choice model and extensive match-specific information, the paper approximates the choice between nearly 2700 college options to examine the effect of several dissimilar state systems. The results suggest that the level and distribution pattern of subsidies strongly affect decisions. If the aid could instead be applied to any in-state college, up to 29% more students would prefer to attend private four-year colleges. © 2004 President and Fellows of Harvard College and the Massachusetts Institute of Technology.

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Bibliographic Info

Article provided by MIT Press in its journal Review of Economics and Statistics.

Volume (Year): 86 (2004)
Issue (Month): 3 (August)
Pages: 767-782

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Handle: RePEc:tpr:restat:v:86:y:2004:i:3:p:767-782

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References

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  1. Terry Long, B.Bridget, 2004. "How have college decisions changed over time? An application of the conditional logistic choice model," Journal of Econometrics, Elsevier, Elsevier, vol. 121(1-2), pages 271-296.
  2. Peltzman, Sam, 1973. "The Effect of Government Subsidies-in-Kind on Private Expenditures: The Case of Higher Education," Journal of Political Economy, University of Chicago Press, University of Chicago Press, vol. 81(1), pages 1-27, Jan.-Feb..
  3. Ganderton, Philip T., 1992. "The effect of subsidies in kind on the choice of a college," Journal of Public Economics, Elsevier, Elsevier, vol. 48(3), pages 269-292, August.
  4. Johnson, George E, 1984. "Subsidies for Higher Education," Journal of Labor Economics, University of Chicago Press, University of Chicago Press, vol. 2(3), pages 303-18, July.
  5. John M. Quigley & Daniel L. Rubinfeld, 1993. "Public Choices in Public Higher Education," NBER Chapters, National Bureau of Economic Research, Inc, in: Studies of Supply and Demand in Higher Education, pages 243-284 National Bureau of Economic Research, Inc.
  6. Thomas J. Kane, 1995. "Rising Public College Tuition and College Entry: How Well Do Public Subsidies Promote Access to College?," NBER Working Papers 5164, National Bureau of Economic Research, Inc.
  7. Caroline M. Hoxby & Bridget Terry, 1999. "Explaining Rising Income and wage Inequality Among the College Educated," NBER Working Papers 6873, National Bureau of Economic Research, Inc.
  8. Allen, Robert F. & Shen, Jianshou, 1999. "Some new evidence of the character of competition among higher education institutions," Economics of Education Review, Elsevier, Elsevier, vol. 18(4), pages 465-470, October.
  9. Daniel McFadden, 1977. "Quantitative Methods for Analyzing Travel Behaviour of Individuals: Some Recent Developments," Cowles Foundation Discussion Papers, Cowles Foundation for Research in Economics, Yale University 474, Cowles Foundation for Research in Economics, Yale University.
  10. Pechman, Joseph A, 1972. "Note on the Intergenerational Transfer of Public Higher-Education Benefits," Journal of Political Economy, University of Chicago Press, University of Chicago Press, vol. 80(3), pages S256-59, Part II, .
  11. Sonstelie, Jon, 1982. "The Welfare Cost of Free Public Schools," Journal of Political Economy, University of Chicago Press, University of Chicago Press, vol. 90(4), pages 794-808, August.
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Cited by:
  1. Monks, James, 2009. "The impact of merit-based financial aid on college enrollment: A field experiment," Economics of Education Review, Elsevier, Elsevier, vol. 28(1), pages 99-106, February.
  2. Fernando A. Broner & R. Gaston Gelos & Carmen M. Reinhart, 2005. "When in Peril, Retrench: Testing the Portfolio Channel of Contagion," Working Papers, Barcelona Graduate School of Economics 207, Barcelona Graduate School of Economics.
  3. Lisa M. Dickson & Matea Pender, 2010. "Do In-State Tuition Benefits Affect the Enrollment of Non-Citizens? Evidence from Universities in Texas," UMBC Economics Department Working Papers, UMBC Department of Economics 10-125, UMBC Department of Economics.
  4. Eric P. Bettinger & Bridget Terry Long, 2005. "Addressing the Needs of Under-Prepared Students in Higher Education: Does College Remediation Work?," NBER Working Papers 11325, National Bureau of Economic Research, Inc.
  5. Bridget Terry Long, 2003. "The Impact of Federal Tax Credits for Higher Education Expenses," NBER Working Papers 9553, National Bureau of Economic Research, Inc.
  6. Niu, Sunny Xinchun & Tienda, Marta & Cortes, Kalena, 2006. "College selectivity and the Texas top 10% law," Economics of Education Review, Elsevier, Elsevier, vol. 25(3), pages 259-272, June.
  7. Bridget Terry Long, 2014. "The Financial Crisis and College Enrollment: How Have Students and Their Families Responded?," NBER Chapters, National Bureau of Economic Research, Inc, in: How the Financial Crisis and Great Recession Affected Higher Education National Bureau of Economic Research, Inc.
  8. Eric Bettinger & Bridget Terry Long, 2004. "Shape Up or Ship Out: The Effects of Remediation on Students at Four-Year Colleges," NBER Working Papers 10369, National Bureau of Economic Research, Inc.

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