On the role of borrowing constraints in public and private universities' choices

Laura Romero ()
Additional contact information
Laura Romero: Universidad Carlos III de Madrid and Universidad de Malaga

Economics Bulletin, 2005, vol. 9, issue 6, 1-8

Abstract: We investigate the reasons why universities use different combinations of fees and exams to guide admission decisions, focusing on the role of borrowing constraints on such decisions. On the one hand, we show that public universities choose exams and zero fees under borrowing constraints because exams are efficient allocation devices, and the objective of public institutions is the maximization of surplus. On the other hand, private universities prefer the use of fees to guide admission policies since tuition fees are not only an allocation device but also a source of revenues. Interestingly, we find that while borrowing constraints do not affect quality and admission standards in the public university, they reduce both quality and fees in the private.

Keywords: borrowing; constraints. (search for similar items in EconPapers)
JEL-codes: I2 (search for similar items in EconPapers)
Date: 2005-08-04
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

Downloads: (external link)
http://www.accessecon.com/pubs/EB/2005/Volume9/EB-05I20002A.pdf (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:ebl:ecbull:eb-05i20002

Access Statistics for this article

More articles in Economics Bulletin from AccessEcon
Bibliographic data for series maintained by John P. Conley ().