Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/86536
Authors: 
Dur, Robert
Glazer, Amihai
Year of Publication: 
2005
Series/Report no.: 
Tinbergen Institute Discussion Paper 05-010/1
Abstract: 
College education is not only an investment; for many people it also generates consumption benefits. If these benefits are normal goods, then the rich attend college at higher rates than the poor. Furthermore, the marginal poor student is smarter than the marginal rich student. Colleges aiming to attract smart students may therefore charge lower tuition to poorer students, even when the colleges lack market power. Moreover, when the social return to education exceeds the private return, allocative efficiency requires government grants to students to be means-tested.
Subjects: 
tuition policy
education subsidies
self-selection
JEL: 
H52
I2
Document Type: 
Working Paper

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