Competition between public and private universities: quality, prices and exams
The rapid growth of private higher education in response to high demand is a recent phenomenon in most European countries. This paper provides a theoretical model of the higher education market in which a public and a private university compete for students in the presence of borrowing constraints. We find that there exists a unique equilibrium in which the public institution is of higher quality than the private institution. This result supports the observation across many European countries that public universities have usually higher quality and admission standards than their private competitors.
References listed on IDEAS
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- Raquel Fernandez, 1998.
"Education and Borrowing Constraints: Tests vs. Prices,"
NBER Working Papers
6588, National Bureau of Economic Research, Inc.
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