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A model of school behavior: tuition fees and grading standards

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  • Dario Maldonado

Abstract

This paper uses a hybrid human capital / signaling model to study grading standards in schools when tuition fees are allowed. The paper analyzes the grading standard set by a profit maximizing school and compares it with the efficient one. The paper also studies grading standards when tuition fees have limits. When fees are regulated a profit maximizing school will set lower grading standards than when they are not regulated. Credit constraints of families also induce schools to lower their standards. Given that in the model presented competition is not feasible, these results show the importance of regulation of grading standards.

Suggested Citation

  • Dario Maldonado, 2008. "A model of school behavior: tuition fees and grading standards," Documentos de Trabajo 5106, Universidad del Rosario.
    • Handle: RePEc:col:000092:005106
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    File URL: http://repository.urosario.edu.co/bitstream/handle/10336/10950/5106.pdf
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    References listed on IDEAS

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    1. De Fraja, Gianni & Landeras, Pedro, 2006. "Could do better: The effectiveness of incentives and competition in schools," Journal of Public Economics, Elsevier, vol. 90(1-2), pages 189-213, January.
    2. Betts, Julian R, 1998. "The Impact of Educational Standards on the Level and Distribution of Earnings," American Economic Review, American Economic Association, vol. 88(1), pages 266-275, March.
    3. Betts, Julian R. & Grogger, Jeff, 2003. "The impact of grading standards on student achievement, educational attainment, and entry-level earnings," Economics of Education Review, Elsevier, vol. 22(4), pages 343-352, August.
    4. Giorgio Brunello & Lorenzo Rocco, 2008. "Educational Standards in Private and Public Schools," Economic Journal, Royal Economic Society, vol. 118(533), pages 1866-1887, November.
    5. Costrell, Robert M, 1994. "A Simple Model of Educational Standards," American Economic Review, American Economic Association, vol. 84(4), pages 956-971, September.
    6. Epple, Dennis & Romano, Richard E, 1998. "Competition between Private and Public Schools, Vouchers, and Peer-Group Effects," American Economic Review, American Economic Association, vol. 88(1), pages 33-62, March.
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    Cited by:

    1. Manna, Ester, 2013. "Mixed Duopoly with Motivated Teachers," MPRA Paper 52041, University Library of Munich, Germany.
    2. Cremer, Helmuth & Maldonado, Dario, 2013. "Mixed oligopoly in education," TSE Working Papers 13-381, Toulouse School of Economics (TSE).

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