Optimal government subsidies to universities in the face of tuition and enrollment constraints

Stephen T. Easton and Duane Rockerbie ()

Education Economics, 2008, vol. 16, issue 2, pages 191-201

Abstract: This paper develops a simple static model of an imperfectly competitive university operating under government-imposed constraints on the ability to raise tuition fees and increase enrollments. The model has particular applicability to Canadian universities. Assuming an average cost pricing rule, rules for adequate government subsidies (operating grants) are derived under conditions of a forced reduction in tuition fees and limiting the increase in tuition fees in the face of increasing demand. These rules are simple to operationalize and interpret.

Keywords: education demand; tuition ceiling; deregulation (search for similar items in EconPapers)
Date: 2008

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Persistent link: http://EconPapers.repec.org/RePEc:taf:edecon:v:16:y:2008:i:2:p:191-201

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