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Nearly-efficient tuitions and subsidies in American public higher education
ARTICLE

, Professor of Management Sciences, Tippie College of Business, United States ; , Professor Emeritus of Economics and Management Sciences, Tippie College of Business, United States

Economics of Education Review Volume 55, Number 1, ISSN 0272-7757 Publisher: Elsevier Ltd

Abstract

A two-stage setting for determining subsidies and tuitions in a public university context is developed where fixed costs introduce an efficiency-enhancing role for taxpayer-financed appropriations. The optimal subsidy per enrollment is shown to be proportional to students’ maximum net willingness to pay. This result extends a well-known result associated with Ramsey pricing to include endogenous appropriations to public higher education. Realistic restrictions are imposed on the subsidy structure, and scenarios for determining tuitions are addressed and illustrated numerically, using budget data for the University of Iowa and the University of Michigan.

Citation

Burer, S. & Fethke, G. (2016). Nearly-efficient tuitions and subsidies in American public higher education. Economics of Education Review, 55(1), 182-197. Elsevier Ltd. Retrieved March 26, 2023 from .

This record was imported from Economics of Education Review on March 1, 2019. Economics of Education Review is a publication of Elsevier.

Full text is availabe on Science Direct: http://dx.doi.org/10.1016/j.econedurev.2016.09.003

Keywords

References

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