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Can State University Fees Increase Welfare? A Mixed Oligopoly Approach

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  • Elena Del Rey

Abstract

When students are unable to borrow, exams can be more efficient than fees in allocating students to schools. Optimal fees will then be zero for a monopolistic state university, but they can be positive when there is competition with a private, revenue-oriented university. The reason is that, by raising its tuition fees, the state university induces the private university to enrol more students. As a result, total enrolments and thus welfare can increase. For this to be possible we need the private university (i) to be of lower quality and selective, or (ii) to be of higher quality and not selective.

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  • Elena Del Rey, 2009. "Can State University Fees Increase Welfare? A Mixed Oligopoly Approach," Journal of Institutional and Theoretical Economics (JITE), Mohr Siebeck, Tübingen, vol. 165(4), pages 670-683, December.
    • Handle: RePEc:mhr:jinste:urn:sici:0932-4569(200912)165:4_670:csufiw_2.0.tx_2-k
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    References listed on IDEAS

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    1. Fernandez, R., 1998. "Education and Borrowing Constraints: Tests vs Prices," Working Papers 98-17, C.V. Starr Center for Applied Economics, New York University.
    2. Chapman, Bruce, 2006. "Income Contingent Loans for Higher Education: International Reforms," Handbook of the Economics of Education, in: Erik Hanushek & F. Welch (ed.), Handbook of the Economics of Education, edition 1, volume 2, chapter 25, pages 1435-1503, Elsevier.
    3. Joachim Jickeli, 2001. "The Role of Markets and Government in Human-Capital Building and Education: A Research Program in Institutional Economics," Journal of Institutional and Theoretical Economics (JITE), Mohr Siebeck, Tübingen, vol. 157(1), pages 87-107, March.
    4. Bas Jacobs & Frederick van der Ploeg, 2006. "Guide to reform of higher education: a European perspective [‘The efficiency of Australian universities: a data envelopment analysis’]," Economic Policy, CEPR, CESifo, Sciences Po;CES;MSH, vol. 21(47), pages 536-592.
    5. Johnstone, D. Bruce, 2004. "The economics and politics of cost sharing in higher education: comparative perspectives," Economics of Education Review, Elsevier, vol. 23(4), pages 403-410, August.
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    Cited by:

    1. Del Rey Elena & Estevan Fernanda, 2020. "Assessing Higher Education Policy in Brazil: A Mixed Oligopoly Approach," The B.E. Journal of Economic Analysis & Policy, De Gruyter, vol. 20(1), pages 1-16, January.
    2. Jacqmin, Julien, 2014. "The Emergence of For-Profit Higher Education Institutions," MPRA Paper 59299, University Library of Munich, Germany.

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    JEL classification:

    • I21 - Health, Education, and Welfare - - Education - - - Analysis of Education

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