Optimal government subsidies to universities in the face of tuition and enrollment constraints

This paper develops a simple static model of an imperfectly competitive university operating under government-imposed constraints on the ability to raise tuition fees and increase enrollments. The model has particular applicability to Canadian universities. Assuming an average cost pricing rule, rul...

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Bibliographic Details
Published inEducation Economics Vol. 16; no. 2; pp. 191 - 201
Main Authors Easton, Stephen T., Rockerbie, Duane W.
Format Journal Article Book Review
LanguageEnglish
Published Abingdon Routledge 01.06.2008
Taylor and Francis Journals
Taylor & Francis Ltd
SeriesEducation Economics
Subjects
Canada
Colleges & universities
Colleges and universities
Demand
Deregulation
Economics of education
education demand
Educational Demand
Educational Finance
Enrollment
Enrollments
Foreign Countries
Government subsidies
Grants
Higher education
Subsidies
Tuition
tuition ceiling
Universities
Canada
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Summary:This paper develops a simple static model of an imperfectly competitive university operating under government-imposed constraints on the ability to raise tuition fees and increase enrollments. The model has particular applicability to Canadian universities. Assuming an average cost pricing rule, rules for adequate government subsidies (operating grants) are derived under conditions of a forced reduction in tuition fees and limiting the increase in tuition fees in the face of increasing demand. These rules are simple to operationalize and interpret.
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ISSN:0964-5292
1469-5782
DOI:10.1080/09645290701761388