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Market Power and Price Discrimination in the U.S. Market for Higher Education

Dennis Epple, Richard Romano (), Sinan Sarpça, Holger Sieg () and Melanie Zaber ()
Additional contact information
Holger Sieg: University of Pennsylvania
Melanie Zaber: Carnegie Mellon University

No 2017-037, Working Papers from Human Capital and Economic Opportunity Working Group

Abstract: 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)
New Economics Papers: this item is included in nep-com, nep-edu and nep-ind
Date: 2017-05
Note: MIP
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http://humcap.uchicago.edu/RePEc/hka/wpaper/Epple_ ... 017_market-power.pdf First version, April 2017 (application/pdf)

Related works:
Journal Article: Market power and price discrimination in the US market for higher education (2019) Downloads
Working Paper: Market Power and Price Discrimination in the U.S. Market for Higher Education (2017) Downloads
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