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Differential Pricing in Undergraduate Education: Effects on Degree Production by Field

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  • Kevin Stange

Abstract

In the face of declining state support, many universities have introduced differential pricing by undergraduate program as an alternative to across‐the‐board tuition increases. This practice aligns price more closely with instructional costs and students’ ability to pay postgraduation. Exploiting the staggered adoption of these policies across universities, this paper finds that differential pricing does alter the share of students studying engineering and possibly business. There is some evidence that student groups already underrepresented in certain fields are particularly affected by the new pricing policies. Price does appear to be a policy lever through which state governments can alter the allocation of students to majors and thus the field composition of the workforce.

Suggested Citation

  • Kevin Stange, 2015. "Differential Pricing in Undergraduate Education: Effects on Degree Production by Field," Journal of Policy Analysis and Management, John Wiley & Sons, Ltd., vol. 34(1), pages 107-135, January.
    • Handle: RePEc:wly:jpamgt:v:34:y:2015:i:1:p:107-135
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    File URL: http://hdl.handle.net/10.1002/pam.21803
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    Cited by:

    1. Kelchen, Robert & Ortagus, Justin & Rosinger, Kelly & Cassell, Alex, 2022. "The effects of state performance funding policies on student loan debt," Economics of Education Review, Elsevier, vol. 91(C).
    2. Gary Fethke, 2017. "Efficiency And Equity Implications Of Charging Nonresidents Full-Cost Tuitions," Contemporary Economic Policy, Western Economic Association International, vol. 35(4), pages 603-614, October.
    3. Christopher Avery & Oded Gurantz & Michael Hurwitz & Jonathan Smith, 2018. "Shifting College Majors in Response to Advanced Placement Exam Scores," Journal of Human Resources, University of Wisconsin Press, vol. 53(4), pages 918-956.
    4. Burer, Samuel & Fethke, Gary, 2016. "Nearly-efficient tuitions and subsidies in American public higher education," Economics of Education Review, Elsevier, vol. 55(C), pages 182-197.
    5. Peter Arcidiacono & Esteban M. Aucejo & V. Joseph Hotz, 2016. "University Differences in the Graduation of Minorities in STEM Fields: Evidence from California," American Economic Review, American Economic Association, vol. 106(3), pages 525-562, March.
    6. Steven W. Hemelt & Kevin M. Stange, 2016. "Marginal Pricing and Student Investment in Higher Education," Journal of Policy Analysis and Management, John Wiley & Sons, Ltd., vol. 35(2), pages 441-471, April.
    7. Serena Canaan & Antoine Deeb & Pierre Mouganie, 2022. "Adviser Value Added and Student Outcomes: Evidence from Randomly Assigned College Advisers," American Economic Journal: Economic Policy, American Economic Association, vol. 14(4), pages 151-191, November.
    8. Ozan Jaquette & Edna Parra, 2016. "The Problem with the Delta Cost Project Database," Research in Higher Education, Springer;Association for Institutional Research, vol. 57(5), pages 630-651, August.
    9. Joseph G. Altonji & Peter Arcidiacono & Arnaud Maurel, 2015. "The Analysis of Field Choice in College and Graduate School: Determinants and Wage Effects," NBER Working Papers 21655, National Bureau of Economic Research, Inc.
    10. 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.
    11. Lowry, Danielle & Page, Lindsay C. & Nurshatayeva, Aizat & Iriti, Jennifer, 2024. "Subtraction by addition: Do private scholarship awards lead to financial aid displacement?," Economics of Education Review, Elsevier, vol. 99(C).
    12. Luc Bridet & Margaret Leighton, 2015. "The Major Decision: Labor Market Implications of the Timing of Specialization in College," Discussion Paper Series, School of Economics and Finance 201510, School of Economics and Finance, University of St Andrews.
    13. Steven W. Hemelt & Kevin M. Stange & Fernando Furquim & Andrew Simon & John E. Sawyer, 2021. "Why Is Math Cheaper than English? Understanding Cost Differences in Higher Education," Journal of Labor Economics, University of Chicago Press, vol. 39(2), pages 397-435.
    14. Haggag, Kareem & Patterson, Richard W. & Pope, Nolan G. & Feudo, Aaron, 2021. "Attribution bias in major decisions: Evidence from the United States Military Academy," Journal of Public Economics, Elsevier, vol. 200(C).
    15. Arpita Patnaik & Matthew J. Wiswall & Basit Zafar, 2020. "College Majors," NBER Working Papers 27645, National Bureau of Economic Research, Inc.
    16. Brent J. Evans, 2017. "SMART Money: Do Financial Incentives Encourage College Students to Study Science?," Education Finance and Policy, MIT Press, vol. 12(3), pages 342-368, Summer.
    17. John V. Winters, 2017. "Do Native STEM Graduates Increase Innovation? Evidence from U.S. Metropolitan Areas," Economics Working Paper Series 1714, Oklahoma State University, Department of Economics and Legal Studies in Business.
    18. Jaison R. Abel & Richard Deitz, 2013. "Do the benefits of college still outweigh the costs?," Current Issues in Economics and Finance, Federal Reserve Bank of New York, vol. 20.
    19. Winters, John V., 2014. "Foreign and Native-Born STEM Graduates and Innovation Intensity in the United States," IZA Discussion Papers 8575, Institute of Labor Economics (IZA).
    20. Bleemer , Zachary & Mehta, Aashish, 2021. "College Major Restrictions and Student Stratification," University of California at Berkeley, Center for Studies in Higher Education qt513249vg, Center for Studies in Higher Education, UC Berkeley.

    More about this item

    JEL classification:

    • I20 - Health, Education, and Welfare - - Education - - - General
    • I22 - Health, Education, and Welfare - - Education - - - Educational Finance; Financial Aid
    • I28 - Health, Education, and Welfare - - Education - - - Government Policy
    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity

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