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

Tania Oliveira (to20@le.ac.uk)

No 06/6, Discussion Papers in Economics from Division of Economics, School of Business, University of Leicester

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.

Keywords: Competition between private and public universities; educational standards (search for similar items in EconPapers)
JEL-codes: H42 H52 I22 I23 (search for similar items in EconPapers)
Date: 2006-04
New Economics Papers: this item is included in nep-edu, nep-pbe and nep-sog
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Citations: View citations in EconPapers (10)

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