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|dc.contributor.author||Winston, Gordon C.||en_US|
|dc.description.abstract||College tuition, as the price of higher education services, defies familiar economicanalysis in important ways. It is recognized that tuition is a price that covers only afraction of the cost of producing those educational services (about a third, nationally),creating an in-kind subsidy for students (the balance being made up by large flows ofdonative resources from gifts, appropriations, and returns on wealth). This paperexamines yet another important economic peculiarity of tuition; it takes seriously inputand output markets implied by Rothschild-White (1995 JPE) in which a single event – ofa student?s matriculation – is simultaneously a transaction in both an input market (wherea wage is paid for a student?s peer quality) and an output market (where a price is paid forthe college?s educational services). Those two prices are obscured by the fact that thepeer wage is paid in the form of a discount on the price of educational services as well asby the fact that the schools? sales (tuition) revenues are significantly augmented by thosedonated resources. This framing sees a school?s access to donated resources (wealth)critical in determining which market – peer quality inputs or educational services sales – will most influence its behavior. Apparent anomalies in the product market – like queuesof unsatisfied customers that persist while schools refuse to expand capacity – disappearwhen they are seen to be the result of an input market where a queue of job applicants isused to allow the firm to select on worker – peer – quality (the result of an Akerlof-Yellen efficiency wage).||en_US|
|dc.relation.ispartofseries|||aWPEHE discussion paper series / Williams College, Williams Project on the Economics of Higher Education |x65||en_US|
|dc.title||Toward a Theory of Tuition: Prices, Peer Wages, and Competition in Higher Education||en_US|
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