TY - JOUR
T1 - Pricing and university autonomy
T2 - Tuition deregulation in Texas
AU - Kim, Jeongeun
AU - Stange, Kevin
N1 - Funding Information:
8. Texas A&M and the University of Houston report that additional revenue, beyond the 20 percent set aside for financial aid, is largely retained by the colleges and spent at the discretion of the dean of the colleges (Ravenscroft and Enyeart 2009).
Publisher Copyright:
© 2016 Russell Sage Foundation.All right reserved..
PY - 2016/4
Y1 - 2016/4
N2 - This paper investigates changes in tuition policies in the wake of tuition deregulation in Texas, which in 2003 transferred tuition-setting authority from the state legislature to institutions. We find that price increases accelerated, particularly at the most selective institutions. Institutions also began differentiating price by undergraduate program, raising relative prices for the most costly and lucrative majors, including engineering, business, nursing, and architecture. Price increases were particularly large for institutions with the highest initial costs and for programs with a high earnings premium within institutions, though lower for institutions with more low-income students. These distinctions suggest that public postsecondary institutions respond to microeconomic incentives when given greater autonomy to set price, and take some measures to alleviate impacts on low-income students. The Texas experience suggests that decentralized price-setting generates greater price differentiation within the public higher education system, both across and within institutions.
AB - This paper investigates changes in tuition policies in the wake of tuition deregulation in Texas, which in 2003 transferred tuition-setting authority from the state legislature to institutions. We find that price increases accelerated, particularly at the most selective institutions. Institutions also began differentiating price by undergraduate program, raising relative prices for the most costly and lucrative majors, including engineering, business, nursing, and architecture. Price increases were particularly large for institutions with the highest initial costs and for programs with a high earnings premium within institutions, though lower for institutions with more low-income students. These distinctions suggest that public postsecondary institutions respond to microeconomic incentives when given greater autonomy to set price, and take some measures to alleviate impacts on low-income students. The Texas experience suggests that decentralized price-setting generates greater price differentiation within the public higher education system, both across and within institutions.
KW - College pricing
KW - Deregulation
KW - Differential tuition
KW - Tuition
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U2 - 10.7758/rsf.2016.2.1.06
DO - 10.7758/rsf.2016.2.1.06
M3 - Article
AN - SCOPUS:85037347924
SN - 2377-8253
VL - 2
SP - 112
EP - 146
JO - RSF
JF - RSF
IS - 1
ER -