Tuition Fees as a Commitment Device

Nadine Ketel, Jona Linde (), Hessel Oosterbeek and Bas van der Klaauw
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Jona Linde: Vrije Universiteit Amsterdam

No 7951, IZA Discussion Papers from Institute of Labor Economics (IZA)

Abstract: This paper reports on a field experiment testing for sunk-cost effects in an education setting. Students signing up for extra-curricular tutorial sessions randomly received a discount on the tuition fee. The sunk-cost effect predicts that students who receive larger discounts will attend fewer tutorial sessions. For the full sample, we find little support for this hypothesis, but we find a significant effect of sunk costs on attendance for the 45% of students in our sample who are categorized as sunk-cost prone based on hypothetical survey questions. For them higher tuition fees can serve as a commitment device to attend classes.

Keywords: field experiment; higher education; sunk-cost effect (search for similar items in EconPapers)
JEL-codes: C93 D03 I22 (search for similar items in EconPapers)
Pages: 29 pages
Date: 2014-02
New Economics Papers: this item is included in nep-edu, nep-exp and nep-hrm
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Published - published as 'Tuition Fees and Sunk-Cost Effects' in: Economic Journal, 2016, 126 (598), 2342-2362

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Working Paper: Tuition fees as a commitment device (2014)
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