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Testing Increasing Sensitivity of Enrollment at Private Institutions to Tuition and other Costs

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  • Yu Hsing
  • Hui S. Chang

Abstract

This paper re-examines the demand for higher education at private institutions and tests if in recent years enrollment has become more sensitive to rising tuition and other related costs. Time series data between FY 1964–65 and FY 1990–91 are used as the sample. Major findings are interesting. The general functional form yields coefficients with smaller standard errors and larger value of the test statistics. The logarithmic form can be rejected at the 5% level. Tuition elasticities rose from −0.261 to −0.557 and income elasticities also increased from 0.493 to 1.093 during the sample period. Thus, enrollment has become more sensitive to changes in tuition and other costs. However, part of the loss of enrollment due to tuition increases can be recovered by rising income elasticities.

Suggested Citation

  • Yu Hsing & Hui S. Chang, 1996. "Testing Increasing Sensitivity of Enrollment at Private Institutions to Tuition and other Costs," The American Economist, Sage Publications, vol. 40(1), pages 40-45, March.
    • Handle: RePEc:sae:amerec:v:40:y:1996:i:1:p:40-45
    DOI: 10.1177/056943459604000106
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    References listed on IDEAS

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    Cited by:

    1. Bijan Vasigh & Reza Hamzaee, 2004. "Testing sensitivity of student enrollment with respect to tuition at an institution of higher education," International Advances in Economic Research, Springer;International Atlantic Economic Society, vol. 10(2), pages 133-149, May.
    2. Havranek, Tomas & Irsova, Zuzana & Zeynalova, Olesia, 2017. "Tuition Reduces Enrollment Less Than Commonly Thought," MPRA Paper 78813, University Library of Munich, Germany.
    3. Toutkoushian, Robert K., 2001. "Do parental income and educational attainment affect the initial choices of New Hampshire's college-bound students?," Economics of Education Review, Elsevier, vol. 20(3), pages 245-262, June.

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