IDEAS home Printed from https://ideas.repec.org/p/lec/leecon/06-6.html

Tuition fees and admission standards: how do public and private universities really compete for students?

Author

Listed:
  • Tania Oliveira

Abstract

We study a market where two universities, a public and a private one, compete for students by setting admission standards. Students differ in ability and receive a wage premium for participating in higher education. This wage increases with the quality of the university attended. The private university maximizes profits, the public university maximizes welfare. We show that there is no "same-standard" equilibrium. In a specific example we show that multiple equilibria can exist. In one equilibrium the private university sets a higher admission standard, and in the other equilibrium the public university sets a higher admission standard.

Suggested Citation

  • Tania Oliveira, 2006. "Tuition fees and admission standards: how do public and private universities really compete for students?," Discussion Papers in Economics 06/6, Division of Economics, School of Business, University of Leicester.
    • Handle: RePEc:lec:leecon:06/6
    as

    Download full text from publisher

    File URL: https://www.le.ac.uk/economics/research/RePEc/lec/leecon/dp06-6.pdf
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. 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.
    2. Fernando Galindo-Rueda & Anna Vignoles, 2005. "The Declining Relative Importance of Ability in Predicting Educational Attainment," Journal of Human Resources, University of Wisconsin Press, vol. 40(2).
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Nihat Kamil Anil & Gulnur Eti Icli, 2013. "MBA sudents' satisfaction and loyality: state vs. private universities in Turkey," Tržište/Market, Faculty of Economics and Business, University of Zagreb, vol. 25(2), pages 177-198.
    2. Rim Lahmandi‐Ayed & Hejer Lasram & Didier Laussel, 2021. "Is partial privatization of universities a solution for higher education?," Journal of Public Economic Theory, Association for Public Economic Theory, vol. 23(6), pages 1174-1198, December.
    3. Rim Lahmandi-Ayed & Hejer Lasram & Didier Laussel, 2020. "Is partial privatization of universities a solution for higher education? A successive monopolies model," Working Papers hal-02988323, HAL.
    4. Lisa Grazzini & Annalisa Luporini & Alessandro Petretto, 2010. "Competition between State Universities," Working Papers - Economics wp2010_02.rdf, Universita' degli Studi di Firenze, Dipartimento di Scienze per l'Economia e l'Impresa.
    5. Giorgio Brunello & Lorenzo Rocco, 2008. "Educational Standards in Private and Public Schools," Economic Journal, Royal Economic Society, vol. 118(533), pages 1866-1887, November.
    6. 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.
    7. Aloys Prinz & Thomas Ehrmann, 2022. "Academia as a league system," Journal of Business Economics, Springer, vol. 92(7), pages 1065-1092, September.
    8. repec:rnp:ecopol:e14610 is not listed on IDEAS

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Elias Carroni & Berardino Cesi & Dimitri Paolini, 2016. "Local University Supply and Distance: A Welfare Analysis with Centralized and Decentralized Tuition Fees," Italian Economic Journal: A Continuation of Rivista Italiana degli Economisti and Giornale degli Economisti, Springer;Società Italiana degli Economisti (Italian Economic Association), vol. 2(2), pages 239-252, July.
    2. Alessandro Tampieri, 2016. "Social background effects on school and job opportunities," Education Economics, Taylor & Francis Journals, vol. 24(5), pages 496-510, September.
    3. Craig Andrea & Vierø Marie-Louise, 2013. "Academia or the Private Sector? Sorting of Agents into Institutions and an Outside Sector," The B.E. Journal of Theoretical Economics, De Gruyter, vol. 13(1), pages 303-345, December.
    4. Pier-Andre Bouchard St-Amant, 2013. "University Funding Policies: Buildings Or Citizens?," Working Paper 1302, Economics Department, Queen's University.
    5. Marie-Laure Cabon-Dhersin & Jonas Didisse, 2017. "Inter-university competition and high tuition fees," Post-Print hal-02356872, HAL.
    6. Lindsey Macmillan, 2013. "The role of non-cognitive and cognitive skills, behavioural and educational outcomes in accounting for the intergenerational transmission of worklessness," DoQSS Working Papers 13-01, Quantitative Social Science - UCL Social Research Institute, University College London.
    7. Jeremiah Richey & Alicia Rosburg, 2017. "Changing Roles Of Ability And Education In U.S. Intergenerational Mobility," Economic Inquiry, Western Economic Association International, vol. 55(1), pages 187-201, January.
    8. Francesco Vona, 2011. "Does the Expansion of Higher Education Reduce Educational Inequality? Evidence from 12 European Countries," Documents de Travail de l'OFCE 2011-12, Observatoire Francais des Conjonctures Economiques (OFCE).
    9. Berardino Cesi & Dimitri Paolini, 2014. "Peer Group and Distance: When Widening University Participation is Better," Manchester School, University of Manchester, vol. 82, pages 110-132, December.
    10. Muammer Maral & Münevver Çetin, 2024. "Teaching, research, and third mission efficiency of universities: A data envelopment analysis and hybrid multi‐criteria decision‐making approach," Managerial and Decision Economics, John Wiley & Sons, Ltd., vol. 45(4), pages 2171-2188, June.
    11. Jellal, Mohamed, 2014. "Gouvernance optimale moderne des universités [Modern optimal governance of universities]," MPRA Paper 57275, University Library of Munich, Germany.
    12. Andrew Jones & John Roemer & Pedro Rosa Dias, 2014. "Equalising opportunities in health through educational policy," Social Choice and Welfare, Springer;The Society for Social Choice and Welfare, vol. 43(3), pages 521-545, October.
    13. Bisceglia, Michele & Cellini, Roberto & Siciliani, Luigi & Straume, Odd Rune, 2020. "Optimal dynamic volume-based price regulation," International Journal of Industrial Organization, Elsevier, vol. 73(C).
    14. Masahito Ambashi, 2021. "Theoretical Analysis of University Research and Teaching in the Presence of External Research Funding," KIER Working Papers 1069, Kyoto University, Institute of Economic Research.
    15. Alexander Kemnitz, 2007. "University Funding Reform, Competition, and Teaching Quality," Journal of Institutional and Theoretical Economics (JITE), Mohr Siebeck, Tübingen, vol. 163(2), pages 356-378, June.
    16. Heineck Guido & Riphahn Regina T., 2009. "Intergenerational Transmission of Educational Attainment in Germany – The Last Five Decades," Journal of Economics and Statistics (Jahrbuecher fuer Nationaloekonomie und Statistik), De Gruyter, vol. 229(1), pages 36-60, February.
    17. Lindley, Joanne & McIntosh, Steven, 2015. "Growth in within graduate wage inequality: The role of subjects, cognitive skill dispersion and occupational concentration," Labour Economics, Elsevier, vol. 37(C), pages 101-111.
    18. Eisenkopf, Gerald & Wohlschlegel, Ansgar, 2012. "Regulation in the market for education and optimal choice of curriculum," Journal of Urban Economics, Elsevier, vol. 71(1), pages 53-65.
    19. Umut T¨¹rk, 2018. "Higher Education in Italy: Spatial Accessibility, Participation and Drop-outs," Business and Economic Research, Macrothink Institute, vol. 8(1), pages 38-50, March.
    20. T Agasisti & G Johnes, 2009. "Cost Structure, Efficiency and Heterogeneity in US Higher Education: An Empirical Analysis," Working Papers 599308, Lancaster University Management School, Economics Department.

    More about this item

    Keywords

    ;
    ;

    JEL classification:

    • H42 - Public Economics - - Publicly Provided Goods - - - Publicly Provided Private Goods
    • H52 - Public Economics - - National Government Expenditures and Related Policies - - - Government Expenditures and Education
    • I22 - Health, Education, and Welfare - - Education - - - Educational Finance; Financial Aid
    • I23 - Health, Education, and Welfare - - Education - - - Higher Education; Research Institutions

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:lec:leecon:06/6. See general information about how to correct material in RePEc.

    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 CitEc recognized a bibliographic reference but did not link an item in RePEc 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 RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Abbie Sleath (email available below). General contact details of provider: https://edirc.repec.org/data/deleiuk.html .

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

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.