IDEAS home Printed from https://ideas.repec.org/p/twi/respas/0064.html
   My bibliography  Save this paper

Regulation in the Market for Education and Optimal Choice of Curriculum

Author

Listed:
  • Gerald Eisenkopf
  • Ansgar Wohlschlegel

Abstract

We analyze educational institutions incentives to set up demanding or lax curricula in duopolistic markets for education with endogenous enrolment of students. We assume that there is a positive externality of student achievement on the local economy. Comparing the case of regulated tuition fees with an unregulated market, we identify the following inefficiencies: Under regulated tuition fees schools will set up inefficiently lax curricula in an attempt to please low-quality students even if schools internalize some of the externality. On the other hand, unregulated schools set up excessively differentiated curricula in order to relax competition in tuition fees. Deregulation gets more attractive if a larger fraction of the externality is internalized.

Suggested Citation

  • Gerald Eisenkopf & Ansgar Wohlschlegel, 2011. "Regulation in the Market for Education and Optimal Choice of Curriculum," TWI Research Paper Series 64, Thurgauer Wirtschaftsinstitut, Universität Konstanz.
  • Handle: RePEc:twi:respas:0064
    as

    Download full text from publisher

    File URL: https://www.twi-kreuzlingen.ch/wp-content/uploads/2017/12/twi-rps-064-eisenkopf-wohlschlegel-2011-05.pdf
    Download Restriction: no

    Other versions of this item:

    References listed on IDEAS

    as
    1. Milton Friedman, 1997. "Public Schools: Make Them Private," Education Economics, Taylor & Francis Journals, vol. 5(3), pages 341-344.
    2. Epple, Dennis & Newlon, Elizabeth & Romano, Richard, 2002. "Ability tracking, school competition, and the distribution of educational benefits," Journal of Public Economics, Elsevier, vol. 83(1), pages 1-48, January.
    3. Hoxby, Caroline M., 1999. "The productivity of schools and other local public goods producers," Journal of Public Economics, Elsevier, vol. 74(1), pages 1-30, October.
    4. Andersson, Roland & Quigley, John M. & Wilhelmsson, Mats, 2009. "Urbanization, productivity, and innovation: Evidence from investment in higher education," Journal of Urban Economics, Elsevier, vol. 66(1), pages 2-15, July.
    5. Stephen Machin & Olivier Marie & Sunčica Vujić, 2011. "The Crime Reducing Effect of Education," Economic Journal, Royal Economic Society, vol. 121(552), pages 463-484, May.
    6. Ludger Woesmann, 2003. "Schooling Resources, Educational Institutions and Student Performance: the International Evidence," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 65(2), pages 117-170, May.
    7. Caroline M. Hoxby, 2000. "Does Competition among Public Schools Benefit Students and Taxpayers?," American Economic Review, American Economic Association, vol. 90(5), pages 1209-1238, December.
    8. 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 275-293, July.
    9. 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.
    10. Jepsen, Christopher & Montgomery, Mark, 2009. "Miles to go before I learn: The effect of travel distance on the mature person's choice of a community college," Journal of Urban Economics, Elsevier, vol. 65(1), pages 64-73, January.
    11. Rosenthal, Stuart S. & Strange, William C., 2008. "The attenuation of human capital spillovers," Journal of Urban Economics, Elsevier, vol. 64(2), pages 373-389, September.
    12. Volker Meier, 2004. "Choosing between School Systems: The Risk of Failure," FinanzArchiv: Public Finance Analysis, Mohr Siebeck, Tübingen, vol. 60(1), pages 1-83, April.
    13. Rauch James E., 1993. "Productivity Gains from Geographic Concentration of Human Capital: Evidence from the Cities," Journal of Urban Economics, Elsevier, vol. 34(3), pages 380-400, November.
    14. 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.
    15. 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.
    16. Sandstrom, F. Mikael & Bergstrom, Fredrik, 2005. "School vouchers in practice: competition will not hurt you," Journal of Public Economics, Elsevier, vol. 89(2-3), pages 351-380, February.
    17. 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 573-586, June.
    18. Elizabeth M. Caucutt, 2002. "Educational Vouchers When There Are Peer Group Effects--Size Matters," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 43(1), pages 195-222, February.
    19. Rincke, Johannes, 2006. "Competition in the public school sector: Evidence on strategic interaction among US school districts," Journal of Urban Economics, Elsevier, vol. 59(3), pages 352-369, May.
    20. 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.
    21. Gerald Eisenkopf, 2007. "Learning and Peer Effects," TWI Research Paper Series 21, Thurgauer Wirtschaftsinstitut, Universität Konstanz.
    22. Edward P. Lazear, 2001. "Educational Production," The Quarterly Journal of Economics, Oxford University Press, vol. 116(3), pages 777-803.
    23. Dennis Epple & Richard Romano, 2008. "Educational Vouchers And Cream Skimming," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 49(4), pages 1395-1435, November.
    24. Buddin, Richard & Zamarro, Gema, 2009. "Teacher qualifications and student achievement in urban elementary schools," Journal of Urban Economics, Elsevier, vol. 66(2), pages 103-115, September.
    25. Avner Shaked & John Sutton, 1982. "Relaxing Price Competition Through Product Differentiation," Review of Economic Studies, Oxford University Press, vol. 49(1), pages 3-13.
    26. Stephen Gibbons & Stephen Machin & Olmo Silva, 2008. "Choice, Competition, and Pupil Achievement," Journal of the European Economic Association, MIT Press, vol. 6(4), pages 912-947, June.
    27. Francisco A. Gallego, 2004. "School Choice, Incentives, and Academic Outcomes: Evidence from Chile," Econometric Society 2004 Latin American Meetings 39, Econometric Society.
    28. Roland Benabou, 1993. "Workings of a City: Location, Education, and Production," The Quarterly Journal of Economics, Oxford University Press, vol. 108(3), pages 619-652.
    29. Dennis Epple & Richard Romano & Holger Sieg, 2006. "Admission, Tuition, and Financial Aid Policies in the Market for Higher Education," Econometrica, Econometric Society, vol. 74(4), pages 885-928, July.
    30. Epple, Dennis & Romano, Richard E, 1998. "Competition between Private and Public Schools, Vouchers, and Peer-Group Effects," American Economic Review, American Economic Association, vol. 88(1), pages 33-62, March.
    31. Eisenkopf, Gerald, 2010. "Peer effects, motivation, and learning," Economics of Education Review, Elsevier, vol. 29(3), pages 364-374, June.
    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. Su, Xuejuan & Kaganovich, Michael, 2012. "College Expansion and Curriculum Choice," Working Papers 2012-25, University of Alberta, Department of Economics, revised 01 Apr 2015.
    2. Andrietti, Vincenzo & Su, Xuejuan, 2016. "Education Curriculum and Student Achievement: Theory and Evidence," Working Papers 2016-12, University of Alberta, Department of Economics.
    3. Xefteris, Dimitrios, 2013. "Equilibria in unidirectional spatial models," Economics Letters, Elsevier, vol. 119(2), pages 146-149.

    More about this item

    Keywords

    Education; Local Externalities; Produkt Differentiation; Price Competition; Vouchers;

    JEL classification:

    • I2 - Health, Education, and Welfare - - Education
    • L1 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance

    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:twi:respas:0064. 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: (Gregor Walter). General contact details of provider: http://edirc.repec.org/data/twikrch.html .

    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 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.

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

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.