Effects of tuition discounting on university’s financial performance

Abu Jalal () and Shahriar Khaksari ()
Additional contact information
Abu Jalal: Suffolk University
Shahriar Khaksari: Suffolk University

Review of Quantitative Finance and Accounting, 2019, vol. 52, issue 2, No 4, 439-466

Abstract: Abstract We study how tuition discounting affects the financial decisions of universities, their student recruitment, and reputation. Using a large panel data of U.S. private and public four-year institutions, we find that tuition discounting helps institutions enhance their short-term operating surplus, increase admission yield, and reduce drop-out rate. However, it does not appear to improve the graduation rate or the quality of the incoming students. Institutions relying more on tuition discounting have more financial leverage, less equity, and experience lower liquidity and asset turnover—indicating greater financial risk. These results are stronger for private universities. Finally, out-of-sample tests show that tuition discounting may not help enhance the reputation of private universities.

Keywords: Tuition discounting; University reputation; Financial performance; Higher education financial management (search for similar items in EconPapers)
JEL-codes: I22 I23 (search for similar items in EconPapers)
Date: 2019
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
http://link.springer.com/10.1007/s11156-018-0715-8 Abstract (text/html)
Access to full text is restricted to subscribers.

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:kap:rqfnac:v:52:y:2019:i:2:d:10.1007_s11156-018-0715-8

Ordering information: This journal article can be ordered from
http://www.springer.com/finance/journal/11156/PS2

DOI: 10.1007/s11156-018-0715-8

Access Statistics for this article

Review of Quantitative Finance and Accounting is currently edited by Cheng-Few Lee

More articles in Review of Quantitative Finance and Accounting from Springer
Bibliographic data for series maintained by Sonal Shukla () and Springer Nature Abstracting and Indexing ().