Tuition fees, self-esteem and social heterogeneity

David Flacher and Hugo Harari-Kermadec

Education Economics, 2013, vol. 21, issue 2, 191-210

Abstract: Modelling students' behaviour in relation to tuition fees is a complex task since students' ‘talent’ is not common knowledge. Students observe a private noisy signal of their abilities, while university receives noisy information based on the quantitative and qualitative data provided by university applicants. In this article, we add the heterogeneity of the population to this model: we assume that this heterogeneity means that the perception of skills among a part of the population is biased and underestimates the capabilities of its members to succeed in the higher education system. Our conclusions differ from those derived in the literature and show in particular that the optimal tuition fees for a given number of students are lower than those obtained for a homogeneous population.

Date: 2013
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Citations: View citations in EconPapers (5)

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DOI: 10.1080/09645292.2011.561630

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