Bridging the Learning Gap in the Market for Higher Education: E-learning and Public Subside

This article aims at analyzing the adoption patterns which apply on the market for higher education when two types of learning organizations - namely, traditional learning and e-learning organizations - provide educational programs. We focus on the impact of public subsidies to e‐learning providers in order to evaluate the conditions under which the learning gap is bridged. A welfare analysis is introduced to estimate the relevance of such 'pro e‐learning' public policies. Our first results show that public subsidies enable the e‐learning organization to provide quality‐based and pricing strategies that tend to be similar to those of the brick'n mortar organization. Besides, we find that such short‐term policies positively impact on the global level of quality which is provided by both providers. Nevertheless, our welfare analysis underlines contrasted results about the relevance of such short‐term public policies.