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Public Universities, Tuition and Competition: A Tiebout Model

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  • Schwager, Robert
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    Abstract

    A simple Tiebout model is presented where states provide university education to both immobile and mobile students. State governments choose the quality of public universities by trading off the value of education for the local immobile student population and the costs, net of tuition revenues, of running the university. The quality of education and the assignment of students to universities in an efficient allocation are characterised. It is shown that decentralised decisions result in efficient choices if states are allowed to choose tuition levels freely. If tuition is capped, ine?ciently low qualities are likely to arise. --

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    Bibliographic Info

    Paper provided by ZEW - Zentrum für Europäische Wirtschaftsforschung / Center for European Economic Research in its series ZEW Discussion Papers with number 07-056.

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    Date of creation: 2007
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    Handle: RePEc:zbw:zewdip:6653

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    Keywords: higher education; migration; fiscal externality; club good; tuition;

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    1. Charles M. Tiebout, 1956. "A Pure Theory of Local Expenditures," Journal of Political Economy, University of Chicago Press, vol. 64, pages 416.
    2. Panu Poutvaara, 2004. "Educating Europe," CESifo Working Paper Series 1114, CESifo Group Munich.
    3. Schweizer, Urs, 1996. "Endogenous fertility and the Henry George Theorem," Journal of Public Economics, Elsevier, vol. 61(2), pages 209-228, August.
    4. Poutvaara, Panu, 2006. "Public Education in an Integrated Europe: Studying to Migrate and Teaching to Stay?," IZA Discussion Papers 2478, Institute for the Study of Labor (IZA).
    5. Miceli Thomas J., 1993. "The Decision to Regionalize in the Provision of Education: An Application of the Tiebout Model," Journal of Urban Economics, Elsevier, vol. 33(3), pages 344-360, May.
    6. Epple, Dennis & Romano, Richard E, 1998. "Competition between Private and Public Schools, Vouchers, and Peer-Group Effects," American Economic Review, American Economic Association, vol. 88(1), pages 33-62, March.
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