Cost-Related Tuition Policies and University Enrollments

Abstract

This paper explores the analytical issues which a university would face in implementing a cost-related tuition policy and presents empirical estimates of the impact of implementing such a policy using data from the University of Minnesota. The empirical results suggest that universities can use standard econometric analyses of enrollment demand behavior to reduce considerably the uncertainty about the effects of changes in tuition policy. However, substantial uncertainty remains for some categories of enrollments. In this context the paper addresses the relevant analytical issues in combining incomplete empirical predictions with a procedure of gradual implementation of a cost-related tuition policy and a careful monitoring of enrollments as the policy is implemented.

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