Work detail

The Price Elasticity of the Demand for Higher Education: A Meta-Analysis

Author: Mgr. Olesia Kiiashko
Year: 2016 - summer
Leaders: prof. PhDr. Tomáš Havránek Ph.D.
Work type: Finance, Financial Markets and Banking
Language: English
Pages: 67
Awards and prizes:
Abstract: The main question of this study is whether the demand for higher education is
relatively sensitive to tuition fee changes or is price inelastic. There is no definite
answer in the literature. Approximately 52% of the estimates show it to be
insignificant, 43% rate it as statistically negative, and approximately 5% are
statistically positive. In a quantitative survey of 562 estimates reported in 48
studies, it has been found that large increases in tuition fees have a
disproportionately negative impact on enrollment when potential publication
bias and method heterogeneity are taken into account. The publication bias tests
show that negative results are more preferable among researchers, because it is
well supported by theory (when prices increase demand decreases). The results
also suggest that four aspects of study design are especially effective in
explaining the differences across primary studies: (1) the longer time period
negatively associated with the price c of demand for higher education, (2) while
the cross sectional estimations have reported more negative results, panel data
estimations have reported fewer negative results, (3) controlling for endogeneity
is crucial, (4) while controlling for unemployment rate has no clear conclusive
impact, controlling for income is not significantly associated with the price
elasticity of the demand for higher education.




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