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For Whom the Pell Tolls: Market Power, Tuition Discrimination, and the Bennett Hypothesis

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Author Info
Larry D. Singell () (University of Oregon Economics Department)
Joe A. Stone () (University of Oregon Economics Department)

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Abstract

Are federal Pell grants "appropriated" by universities through increases in tuition - consistent with what is known as the Bennett hypothesis? Based on a panel of 71 universities from 1983 to 1996, we find little evidence of the Bennett hypothesis among either public or lower-ranked private universities. For top-ranked private universities, though, increases in Pell grants appear to be more than matched by increases in net tuition. The behavior most consistent with this result is price discrimination that is not purely redistributive from wealthier to needier students.

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File URL: http://economics.uoregon.edu/papers/UO-2003-12_Singell_Pell.pdf
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Publisher Info
Paper provided by University of Oregon Economics Department in its series University of Oregon Economics Department Working Papers with number 2003-12.

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Length: 27
Date of creation: 10 Apr 2003
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Handle: RePEc:ore:uoecwp:2003-12

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  1. Rebecca J. Acosta, 2001. "How Do Colleges Respond to Changes in Federal Student Aid?," UCLA Economics Working Papers 808, UCLA Department of Economics. [Downloadable!]
  2. Susan M. Dynarski, 1999. "Does Aid Matter? Measuring the Effect of Student Aid on College Attendance and Completion," NBER Working Papers 7422, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
    Other versions:
  3. McPherson, Michael S & Schapiro, Morton Owen, 1991. "Does Student Aid Affect College Enrollment? New Evidence on a Persistent Controversy," American Economic Review, American Economic Association, vol. 81(1), pages 309-18, March. [Downloadable!] (restricted)
  4. Michael J. Rizzo & Ronald G. Ehrenberg, 2003. "Resident and Nonresident Tuition and Enrollment at Flagship State Universities," NBER Working Papers 9516, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
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  5. Joshua D. Angrist, 1993. "The effect of veterans' benefits on education and earnings," Industrial and Labor Relations Review, ILR Review, ILR School, Cornell University, vol. 46(4), pages 637-652, July.
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