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Price Regulation, Price Discrimination, and Equality of Opportunity in Higher Education: Evidence from Texas

Author

Listed:
  • Rodney J. Andrews
  • Kevin M. Stange

Abstract

We assess the importance of price regulation and price discrimination to low-income students' access to opportunities in public higher education. In 2003, Texas shifted tuition-setting authority away from the state legislature to public universities themselves. In response, most institutions raised sticker prices and many began charging more for high-earning majors, such as business and engineering. We find that poor students actually shifted toward higher earning programs following deregulation, relative to non-poor students. Deregulation facilitated more price discrimination through increased grant aid and enabled supply-side enhancements, which may have partially shielded poor students from higher sticker prices.

Suggested Citation

  • Rodney J. Andrews & Kevin M. Stange, 2019. "Price Regulation, Price Discrimination, and Equality of Opportunity in Higher Education: Evidence from Texas," American Economic Journal: Economic Policy, American Economic Association, vol. 11(4), pages 31-65, November.
    • Handle: RePEc:aea:aejpol:v:11:y:2019:i:4:p:31-65
    Note: DOI: 10.1257/pol.20170306
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    Cited by:

    1. Azmat Ghazala & Simion Ştefania, 2021. "Charging for Higher Education: Estimating the Impact on Inequality and Student Outcomes," The B.E. Journal of Economic Analysis & Policy, De Gruyter, vol. 21(1), pages 175-239, January.
    2. Zhu,Yu & Xu, Lei, 2022. "Returns to Higher Education - Graduate and Discipline Premiums," GLO Discussion Paper Series 1091, Global Labor Organization (GLO).
    3. Bleemer , Zachary & Mehta, Aashish, 2021. "College Major Restrictions and Student Stratification," University of California at Berkeley, Center for Studies in Higher Education qt513249vg, Center for Studies in Higher Education, UC Berkeley.
    4. Theresa Geißler, 2025. "Who bears the brunt: Tuition fees and educational mismatch," IAAEU Discussion Papers 202504, Institute of Labour Law and Industrial Relations in the European Union (IAAEU).
    5. Siân Mughan & Jessica Sherrod Hale & Joanna Woronkowicz, 2022. "Build It and will They Come?: The Effect of Investing in Cultural Consumption Amenities in Higher Education on Student-Level Outcomes," Research in Higher Education, Springer;Association for Institutional Research, vol. 63(1), pages 60-91, February.
    6. Sandra E. Black & Jeffrey T. Denning & Lisa J. Dettling & Sarena Goodman & Lesley J. Turner, 2023. "Taking It to the Limit: Effects of Increased Student Loan Availability on Attainment, Earnings, and Financial Well-Being," American Economic Review, American Economic Association, vol. 113(12), pages 3357-3400, December.
    7. Bradley L. Hardy & Dave E. Marcotte, 2022. "Ties that bind? Family income dynamics and children’s post-secondary enrollment and persistence," Review of Economics of the Household, Springer, vol. 20(1), pages 279-303, March.
    8. Lauren Russell, 2021. "Price Effects of Nonprofit College and University Mergers," The Review of Economics and Statistics, MIT Press, vol. 103(1), pages 88-101, March.
    9. Arpita Patnaik & Matthew J. Wiswall & Basit Zafar, 2020. "College Majors," NBER Working Papers 27645, National Bureau of Economic Research, Inc.
    10. Syeda Mubashira Batool & Zhimin Liu, 2021. "Exploring the relationships between socio-economic indicators and student enrollment in higher education institutions of Pakistan," PLOS ONE, Public Library of Science, vol. 16(12), pages 1-17, December.
    11. Drew Allen & Gregory C. Wolniak, 2019. "Exploring the Effects of Tuition Increases on Racial/Ethnic Diversity at Public Colleges and Universities," Research in Higher Education, Springer;Association for Institutional Research, vol. 60(1), pages 18-43, February.
    12. Yan Liu, 2024. "Generative AI : Catalyst for Growth or Harbinger of Premature De-Professionalization ?," Policy Research Working Paper Series 10915, The World Bank.

    More about this item

    JEL classification:

    • D63 - Microeconomics - - Welfare Economics - - - Equity, Justice, Inequality, and Other Normative Criteria and Measurement
    • H75 - Public Economics - - State and Local Government; Intergovernmental Relations - - - State and Local Government: Health, Education, and Welfare
    • I22 - Health, Education, and Welfare - - Education - - - Educational Finance; Financial Aid
    • I23 - Health, Education, and Welfare - - Education - - - Higher Education; Research Institutions
    • I24 - Health, Education, and Welfare - - Education - - - Education and Inequality
    • I28 - Health, Education, and Welfare - - Education - - - Government Policy
    • I32 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - Measurement and Analysis of Poverty

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