Peer effects, financial aid and selection of students into colleges and universities: an empirical analysis

Holger Sieg · Dennis N Epple · Richard Romano

110 citations0/0 files storedRePEc: Research Papers in Economics

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School Choice and Performance Higher Education Research Studies Intergenerational and Educational Inequality Studies

Abstract

This paper develops a model in which colleges seek to maximize the quality of the educational experience provided to their students. We deduce predictions about the hierarchy of schools that emerges in equilibrium, the allocation of students by income and ability among schools, and about the pricing policies that schools adopt. The empirical findings of this paper suggest that there is a hierarchy of school qualities which is characterized by substantial stratification by income and ability. The evidence on pricing by ability is supportive of positive peer effects in educational achievement from high ability at the college level. Copyright © 2003 John Wiley & Sons, Ltd.

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References

2003Does peer ability affect student achievement?1992Public versus Private Investment in Human Capital: Endogenous Growth and Income Inequality 2002Estimating the Payoff to Attending a More Selective College: An Application of Selection on Observables and Unobservables 1998Competition between Private and Public Schools, Vouchers, and Peer-Group Effects 1996Income Distribution, Communities, and the Quality of Public Education 1995The Analytics of the Pricing of Higher Education and Other Services in Which the Customers Are Inputs 2000Mobility, Targeting, and Private-School Vouchers 1998Education-Finance Reform and the Distribution of Education Resources

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