IDEAS home Printed from https://ideas.repec.org/
MyIDEAS: Login to save this paper or follow this series

Education, Research and the Impact of Tuition Fees - A Simple Model of the University

The present paper analyses the behaviour of a university within a neoclassical equilibrium framework. Demand for enrolments is traced back to the decision of potential students which aim at maximizing expected lifetime income. Here, the key factors are the students’ preferences and abilities, the quality of education offered by the university and several external determinants like, e.g., tuition fees and differences in income between graduates and non-graduates. In turn, the behaviour of the university in terms of educational efforts and the strength of academic standards depends on the demand for enrolments, on financial resources available and on the specific objectives pursued by the university. The main emphasis is on the implications of different funding mechanism (governmental grants vs. tuition fees) in combination with different objectives pursued (maximizing enrolments vs. maximizing prestige via research output). It is shown that for given financial resources a university that aims at maximizing prestige always provides only a lower quality of education for a smaller number of students compared to a university that aims at maximizing enrolments. Moreover, the effects caused by changes in governmental grants or tuition fees are quite different depending on the university’s objectives. Yet, there is also one common feature: Irrespective of which utility function is maximized, partially substituting governmental grants by tuition fees would change neither educational efforts nor academic standards, but it would inevitably lead to decreasing enrolments. As a positive side-effect, however, the average ability of the remaining population of students would increase.

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.

File URL: http://www.wiwi.uni-augsburg.de/vwl/institut/paper/265.pdf
Download Restriction: no

Paper provided by Universitaet Augsburg, Institute for Economics in its series Discussion Paper Series with number 265.

as
in new window

Length: pages
Date of creation: Aug 2004
Date of revision:
Handle: RePEc:aug:augsbe:0265
Contact details of provider: Postal: Universitaetsstrasse 16, D-86159 Augsburg, Germany
Phone: +49 821 598 4060
Fax: +49 821 598 4217
Web page: http://www.wiwi.uni-augsburg.de/vwl/institut
Email:


More information through EDIRC

References listed on IDEAS
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.:

as in new window
  1. Michael Rothschild & Lawrence J. White, 1993. "The University in the Marketplace: Some Insights and Some Puzzles," NBER Chapters, in: Studies of Supply and Demand in Higher Education, pages 11-42 National Bureau of Economic Research, Inc.
  2. Michael Hoy & John Livernois & Chris McKenna & Ray Rees & Anthanassios Stengos, 2001. "Mathematics for Economics, 2nd Edition," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262582074, June.
Full references (including those not matched with items on IDEAS)

This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

When requesting a correction, please mention this item's handle: RePEc:aug:augsbe:0265. 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: (Dr. Albrecht Bossert)

If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

If references are entirely missing, you can add them using this form.

If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.

If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.

Please note that corrections may take a couple of weeks to filter through the various RePEc services.

This information is provided to you by IDEAS at the Research Division of the Federal Reserve Bank of St. Louis using RePEc data.