Market Power and Price Discrimination in the U.S. Market for Higher Education
Richard Romano (),
Holger Sieg () and
Melanie Zaber ()
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Holger Sieg: University of Pennsylvania
Melanie Zaber: Carnegie Mellon University
No 2017-037, Working Papers from Human Capital and Economic Opportunity Working Group
The main purpose of this paper is to estimate an equilibrium model of private and public school competition that can generate realistic pricing patterns for private universities in the U.S. We show that the parameters of the model are identified and can be estimated using a semi-parametric estimator given data from the NPSAS. We find substantial price discrimination within colleges. We estimate that a $10,000 increase in family income increases tuition at private schools by on average $210 to $510. A one standard deviation increase in ability decreases tuition by approximately $920 to $1,960 depending on the selectivity of the college. Discounts for minority students range between $110 and $5,750.
Keywords: equilibrium model; competition; price discrimination; NPSAS; pricing patterns (search for similar items in EconPapers)
JEL-codes: H52 I20 L30 (search for similar items in EconPapers)
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http://humcap.uchicago.edu/RePEc/hka/wpaper/Epple_ ... 017_market-power.pdf First version, April 2017 (application/pdf)
Journal Article: Market power and price discrimination in the US market for higher education (2019)
Working Paper: Market Power and Price Discrimination in the U.S. Market for Higher Education (2017)
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Persistent link: https://EconPapers.repec.org/RePEc:hka:wpaper:2017-037
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