College as Country Club: Do Colleges Cater to Students’ Preferences for Consumption?
AbstractThis paper investigates whether demand-side market pressure explains colleges’ decisions to provide consumption amenities to their students. We estimate a discrete choice model of college demand using micro data from the high school classes of 1992 and 2004, matched to extensive information on all four-year colleges in the U.S. We find that most students do appear to value college consumption amenities, including spending on student activities, sports, and dormitories. While this taste for amenities is broad-based, the taste for academic quality is confined to high-achieving students. The heterogeneity in student preferences implies that colleges face very different incentives depending on their current student body and the students who the institution hopes to attract. We estimate that the elasticities implied by our demand model can account for 16 percent of the total variation across colleges in the ratio of amenity to academic spending, and including them on top of key observable characteristics (sector, state, size, selectivity) increases the explained variation by twenty percent.
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Bibliographic InfoPaper provided by National Bureau of Economic Research, Inc in its series NBER Working Papers with number 18745.
Date of creation: Jan 2013
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Find related papers by JEL classification:
- I20 - Health, Education, and Welfare - - Education - - - General
- I21 - Health, Education, and Welfare - - Education - - - Analysis of Education
- I23 - Health, Education, and Welfare - - Education - - - Higher Education; Research Institutions
- J01 - Labor and Demographic Economics - - General - - - Labor Economics: General
- J18 - Labor and Demographic Economics - - Demographic Economics - - - Public Policy
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Blog mentionsAs found by EconAcademics.org, the blog aggregator for Economics research:
- Most US students do not care about the academic quality of their college
by Economic Logician in Economic Logic on 2013-02-13 15:03:00
- Is education really an investment?
by jamesz in TVHE on 2013-02-15 09:43:54
- Brad J. Hershbein & Kevin Hollenbeck, 2013. "The Distribution of College Graduate Debt, 1990 to 2008: A Decomposition Approach," Upjohn Working Papers and Journal Articles 14-204, W.E. Upjohn Institute for Employment Research.
- Justine S. Hastings & Christopher A. Neilson & Seth D. Zimmerman, 2013. "Are Some Degrees Worth More than Others? Evidence from college admission cutoffs in Chile," NBER Working Papers 19241, National Bureau of Economic Research, Inc.
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