The design of the university system
This paper compares the organisation of the university sector under unregulated private provision with the structure which would be chosen by a welfare maximising government. It studies a general equilibrium model where students attend university to earn higher incomes in the labour market, and universities teach them and carry out research. Each university chooses its tuition fee to maximise the amount of resources it can devote to research. Research bestows an externality on society. Government intervention needs to balance labour market efficiency considerations – which would tend to equalise the number of students attending each university – with considerations of efficiency on the production side, which suggest that the most productive universities should teach more students and carry out more research. We find that government concentrates research more that the private market would, but less than it would like to do if it had perfect information about the productivity of universities. It also allows fewer universities than would operate in a private system.
If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
As the access to this document is restricted, you may want to look for a different version under "Related research" (further below) or search for a different version of it.
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Tuckman, Howard P & Gapinski, James H & Hagemann, Robert P, 1977. "Faculty Skills and the Salary Structure in Academe: A Market Perspective," American Economic Review, American Economic Association, vol. 67(4), pages 692-702, September.
- Johnes, Jill & Johnes, Geraint, 1995. "Research funding and performance in U.K. University Departments of Economics: A frontier analysis," Economics of Education Review, Elsevier, vol. 14(3), pages 301-314, September.
- Rob Euwals & Melanie Ward, 2005. "What matters most: teaching or research? Empirical evidence on the remuneration of British academics," Applied Economics, Taylor & Francis Journals, vol. 37(14), pages 1655-1672.
- Gianni De Fraja & Paola Valbonesi, 2009.
"The Design of the University System,"
Discussion Papers in Economics
09/19, Department of Economics, University of Leicester.
- Rey, Elena Del, 2001.
"Teaching versus Research: A Model of State University Competition,"
Journal of Urban Economics,
Elsevier, vol. 49(2), pages 356-373, March.
- DEL REY, Elena, . "Teaching versus research: a model of state university competition," CORE Discussion Papers RP -1501, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
- DEL REY, Elena, 2000. "Teaching versus research: a model of state university competition," CORE Discussion Papers 2000030, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
- David P. Baron & Roger B. Myerson, 1979.
"Regulating a Monopolist with Unknown Costs,"
412, Northwestern University, Center for Mathematical Studies in Economics and Management Science.
- Robert J. Gary-Bobo & Alain Trannoy, 2008. "Efficient Tuition Fees and Examinations," Journal of the European Economic Association, MIT Press, vol. 6(6), pages 1211-1243, December.
- Stacy Berg Dale & Alan Krueger, 1998.
"Estimating the Payoff to Attending a More Selective College: An Application of Selection on Observables and Unobservables,"
788, Princeton University, Department of Economics, Industrial Relations Section..
- Stacy Berg Dale & Alan B. Krueger, 2002. "Estimating The Payoff To Attending A More Selective College: An Application Of Selection On Observables And Unobservables," The Quarterly Journal of Economics, MIT Press, vol. 117(4), pages 1491-1527, November.
- Stacy Berg Dale & Alan B. Krueger, 1999. "Estimating the Payoff to Attending a More Selective College: An Application of Selection on Observables and Unobservables," NBER Working Papers 7322, National Bureau of Economic Research, Inc.
- de Groot, Hans & McMahon, Walter W & Volkwein, J Fredericks, 1991. "The Cost Structure of American Research Universities," The Review of Economics and Statistics, MIT Press, vol. 73(3), pages 424-31, August.
- Robert J. Gary-Bobo & Alain Trannoy, 2005.
"Efficient Tuition & Fees, Examinations, and Subsidies,"
IDEP Working Papers
0501, Institut d'economie publique (IDEP), Marseille, France, revised 01 Mar 2005.
- Gary-Bobo, Robert J. & Trannoy, Alain, 2005. "Efficient Tuition & Fees, Examinations and Subsidies," CEPR Discussion Papers 5011, C.E.P.R. Discussion Papers.
- Dennis Epple & Richard Romano & Holger Sieg, 2006.
"Admission, Tuition, and Financial Aid Policies in the Market for Higher Education,"
Econometric Society, vol. 74(4), pages 885-928, 07.
- Dennis Epple & Richard Romano & Holger Sieg, . "Admission, Tuition, and Financial Aid Policies in the Market for Higher Education," GSIA Working Papers 2003-04, Carnegie Mellon University, Tepper School of Business.
- Danzon, Patricia Munch, 1982. "Hospital `profits' : The effects of reimbursement policies," Journal of Health Economics, Elsevier, vol. 1(1), pages 29-52, May.
- Golden, Bill B. & Tsoodle, Leah J. & Odeh, Oluwarotimi O. & Featherstone, Allen M., 2004.
"Determinants Of Agricultural Economic Faculty Salaries: A Quarter Of A Century Later,"
2005 Annual Meeting, February 5-9, 2005, Little Rock, Arkansas
35651, Southern Agricultural Economics Association.
- Bill B. Golden & Leah J. Tsoodle & Oluwarotimi O. Odeh & Allen M. Featherstone, 2006. "Determinants of Agricultural Economic Faculty Salaries: A Quarter of a Century Later," Review of Agricultural Economics, Agricultural and Applied Economics Association, vol. 28(2), pages 254-261.
- Aghion, Philippe & Dewatripont, Mathias & Hoxby, Caroline & Mas-Colell, Andreu & Sapir, Andreu, 2010.
"The governance and performance of universities: evidence from Europe and the US,"
12502061, Harvard University Department of Economics.
- Philippe Aghion & Mathias Dewatripont & Caroline Hoxby & Andreu Mas-Colell & André Sapir, 2010. "The governance and performance of universities: evidence from Europe and the US," Economic Policy, CEPR;CES;MSH, vol. 25, pages 7-59, 01.
- Philippe Aghion & Mathias Dewatripont & Caroline Hoxby & Andreu Mas-Colell & André Sapir, 2010. "The governance and performance of universities: Evidence from Europe and the US," ULB Institutional Repository 2013/167268, ULB -- Universite Libre de Bruxelles.
- William E. Becker Jr., 1975. "The University Professor as a Utility Maximizer and Producer of Learning, Research, and Income," Journal of Human Resources, University of Wisconsin Press, vol. 10(1), pages 107-115.
- Philippe Aghion & Mathias Dewatripont & Caroline M. Hoxby & Andreu Mas-Colell & André Sapir, 2009. "The Governance and Performance of Research Universities: Evidence from Europe and the U.S," NBER Working Papers 14851, National Bureau of Economic Research, Inc.
- Moretti, Enrico, 2004.
"Estimating the social return to higher education: evidence from longitudinal and repeated cross-sectional data,"
Journal of Econometrics,
Elsevier, vol. 121(1-2), pages 175-212.
- Enrico Moretti, 2002. "Estimating the Social Return to Higher Education: Evidence From Longitudinal and Repeated Cross-Sectional Data," NBER Working Papers 9108, National Bureau of Economic Research, Inc.
- repec:cup:cbooks:9780521337465 is not listed on IDEAS
- Melville McMillan & Wing Chan, 2006. "University Efficiency: A Comparison and Consolidation of Results from Stochastic and Non-stochastic Methods," Education Economics, Taylor & Francis Journals, vol. 14(1), pages 1-30.
- De Fraja, Gianni & Iossa, Elisabetta, 2002. "Competition among Universities and the Emergence of the Elite Institution," Bulletin of Economic Research, Wiley Blackwell, vol. 54(3), pages 275-93, July.
- repec:cup:cbooks:9780521331586 is not listed on IDEAS
- Jean Tirole & Jean-Jaques Laffont, 1985.
"Using Cost Observation to Regulate Firms,"
368, Massachusetts Institute of Technology (MIT), Department of Economics.
- Dranove, David & White, William D, 1994. "Recent Theory and Evidence on Competition in Hospital Markets," Journal of Economics & Management Strategy, Wiley Blackwell, vol. 3(1), pages 169-209, Spring.
- Becker, William E, Jr, 1979. "Professorial Behavior Given a Stochastic Reward Structure," American Economic Review, American Economic Association, vol. 69(5), pages 1010-17, December.
- Terry Long, B.Bridget, 2004. "How have college decisions changed over time? An application of the conditional logistic choice model," Journal of Econometrics, Elsevier, vol. 121(1-2), pages 271-296.
- Epple, Dennis & Romano, Richard & Sieg, Holger, 2000.
"Peer Effects, Financial Aid, and Selection of Students into Colleges and Universities: An Empirical Analysis,"
00-02, Duke University, Department of Economics.
- Holger Sieg & Dennis Epple & Richard Romano, 2003. "Peer effects, financial aid and selection of students into colleges and universities: an empirical analysis," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 18(5), pages 501-525.
- Rothschild, Michael & White, Lawrence J, 1995. "The Analytics of the Pricing of Higher Education and Other Services in Which the Customers Are Inputs," Journal of Political Economy, University of Chicago Press, vol. 103(3), pages 573-86, June.
- Ehrenberg, R.G.Ronald G., 2004. "Econometric studies of higher education," Journal of Econometrics, Elsevier, vol. 121(1-2), pages 19-37.
- Izadi, Hooshang & Johnes, Geraint & Oskrochi, Reza & Crouchley, Robert, 2002. "Stochastic frontier estimation of a CES cost function: the case of higher education in Britain," Economics of Education Review, Elsevier, vol. 21(1), pages 63-71, February.
- Dundar, Halil & Lewis, Darrell R., 1995. "Departmental productivity in American universities: Economies of scale and scope," Economics of Education Review, Elsevier, vol. 14(2), pages 119-144, June.
- Jean-Jacques Laffont & Jean Tirole, 1993. "A Theory of Incentives in Procurement and Regulation," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262121743, August.
- John Beath & Joanna Poyago-Theotoky & David Ulph, 2005. "University Funding Systems and their Impact on Research and Teaching: A General Framework," Discussion Paper Series 2005_2, Department of Economics, Loughborough University.
- Yaakov Gilboa & Moshe Justman, 2005. "Academic Admissions Standards: Implications For Output, Distribution, And Mobility," Journal of the European Economic Association, MIT Press, vol. 3(5), pages 1105-1133, 09.
- Caroline M. Hoxby, 1997. "How the Changing Market Structure of U.S. Higher Education Explains College Tuition," NBER Working Papers 6323, National Bureau of Economic Research, Inc.
- Stijn Kelchtermans & Frank Verboven, 2010. "Participation and study decisions in a public system of higher education," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 25(3), pages 355-391.
When requesting a correction, please mention this item's handle: RePEc:eee:pubeco:v:96:y:2012:i:3:p:317-330. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Zhang, Lei)
If references are entirely missing, you can add them using this form.