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Price Regulation, Price Discrimination, and Equality of Opportunity in Higher Education: Evidence from Texas

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  • Rodney J. Andrews
  • Kevin M. Stange

Abstract

We assess the importance of price regulation and price discrimination to low-income students' access to opportunities in public higher education. In 2003, Texas shifted tuition-setting authority away from the state legislature to public universities themselves. In response, most institutions raised sticker prices and many began charging more for high-earning majors, such as business and engineering. We find that poor students actually shifted toward higher earning programs following deregulation, relative to non-poor students. Deregulation facilitated more price discrimination through increased grant aid and enabled supply-side enhancements, which may have partially shielded poor students from higher sticker prices.

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  • Rodney J. Andrews & Kevin M. Stange, 2019. "Price Regulation, Price Discrimination, and Equality of Opportunity in Higher Education: Evidence from Texas," American Economic Journal: Economic Policy, American Economic Association, vol. 11(4), pages 31-65, November.
    • Handle: RePEc:aea:aejpol:v:11:y:2019:i:4:p:31-65
    Note: DOI: 10.1257/pol.20170306
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    Cited by:

    1. Azmat Ghazala & Simion Ştefania, 2021. "Charging for Higher Education: Estimating the Impact on Inequality and Student Outcomes," The B.E. Journal of Economic Analysis & Policy, De Gruyter, vol. 21(1), pages 175-239, January.
    2. Zhu,Yu & Xu, Lei, 2022. "Returns to Higher Education - Graduate and Discipline Premiums," GLO Discussion Paper Series 1091, Global Labor Organization (GLO).
    3. Sandra E. Black & Jeffrey T. Denning & Lisa J. Dettling & Sarena Goodman & Lesley J. Turner, 2023. "Taking It to the Limit: Effects of Increased Student Loan Availability on Attainment, Earnings, and Financial Well-Being," American Economic Review, American Economic Association, vol. 113(12), pages 3357-3400, December.
    4. Siân Mughan & Jessica Sherrod Hale & Joanna Woronkowicz, 2022. "Build It and will They Come?: The Effect of Investing in Cultural Consumption Amenities in Higher Education on Student-Level Outcomes," Research in Higher Education, Springer;Association for Institutional Research, vol. 63(1), pages 60-91, February.
    5. Bradley L. Hardy & Dave E. Marcotte, 2022. "Ties that bind? Family income dynamics and children’s post-secondary enrollment and persistence," Review of Economics of the Household, Springer, vol. 20(1), pages 279-303, March.
    6. Lauren Russell, 2021. "Price Effects of Nonprofit College and University Mergers," The Review of Economics and Statistics, MIT Press, vol. 103(1), pages 88-101, March.
    7. Arpita Patnaik & Matthew J. Wiswall & Basit Zafar, 2020. "College Majors," NBER Working Papers 27645, National Bureau of Economic Research, Inc.
    8. Drew Allen & Gregory C. Wolniak, 2019. "Exploring the Effects of Tuition Increases on Racial/Ethnic Diversity at Public Colleges and Universities," Research in Higher Education, Springer;Association for Institutional Research, vol. 60(1), pages 18-43, February.

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    More about this item

    JEL classification:

    • D63 - Microeconomics - - Welfare Economics - - - Equity, Justice, Inequality, and Other Normative Criteria and Measurement
    • H75 - Public Economics - - State and Local Government; Intergovernmental Relations - - - State and Local Government: Health, Education, and Welfare
    • I22 - Health, Education, and Welfare - - Education - - - Educational Finance; Financial Aid
    • I23 - Health, Education, and Welfare - - Education - - - Higher Education; Research Institutions
    • I24 - Health, Education, and Welfare - - Education - - - Education and Inequality
    • I28 - Health, Education, and Welfare - - Education - - - Government Policy
    • I32 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - Measurement and Analysis of Poverty

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