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Public Universities, Tuition and Competition: A Tiebout Model

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  • Schwager, Robert

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.

Suggested Citation

  • Schwager, Robert, 2007. "Public Universities, Tuition and Competition: A Tiebout Model," ZEW Discussion Papers 07-056, ZEW - Leibniz Centre for European Economic Research.
    • Handle: RePEc:zbw:zewdip:6653
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    File URL: https://www.econstor.eu/bitstream/10419/24630/1/dp07056.pdf
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    References listed on IDEAS

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    5. Fabel, Oliver & Lehmann, Erik & Warning, Susanne, 2001. "Der relative Vorteil deutscher wirtschaftswissenschaftlicher Fachbereiche im Wettbewerb um studentischen Zuspruch: Qualität des Studiengangs oder des Studienortes?," Discussion Papers, Series I 311, University of Konstanz, Department of Economics.
    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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    8. Schweizer, Urs, 1996. "Endogenous fertility and the Henry George Theorem," Journal of Public Economics, Elsevier, vol. 61(2), pages 209-228, August.
    9. Kraus, Margit, 2004. "Schätzung von Kostenfunktionen für die bundesdeutsche Hochschulausbildung: Ein konzeptioneller Ansatz im empirischen Test," ZEW Discussion Papers 04-36, ZEW - Leibniz Centre for European Economic Research.
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    Cited by:

    1. Hübner, Malte, 2012. "The welfare effects of discriminating between in-state and out-of-state students," Regional Science and Urban Economics, Elsevier, vol. 42(1-2), pages 364-374.
    2. Georg-Benedikt Fischer & Berthold U. Wigger, 2016. "Fiscal Competition and Higher Education Spending in Germany," German Economic Review, Verein für Socialpolitik, vol. 17(2), pages 234-252, May.
    3. Dwenger, Nadja & Storck, Johanna & Wrohlich, Katharina, 2012. "Do tuition fees affect the mobility of university applicants? Evidence from a natural experiment," Economics of Education Review, Elsevier, vol. 31(1), pages 155-167.

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    More about this item

    Keywords

    higher education; migration; fiscal externality; club good; tuition;
    All these keywords.

    JEL classification:

    • H75 - Public Economics - - State and Local Government; Intergovernmental Relations - - - State and Local Government: Health, Education, and Welfare
    • H77 - Public Economics - - State and Local Government; Intergovernmental Relations - - - Intergovernmental Relations; Federalism
    • I28 - Health, Education, and Welfare - - Education - - - Government Policy

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