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A Model of University Admission and Tuition Policy

Leif Danziger
The Scandinavian Journal of Economics
Vol. 92, No. 3 (Sep., 1990), pp. 415-436
Published by: Wiley on behalf of The Scandinavian Journal of Economics
DOI: 10.2307/3440009
Stable URL: http://www.jstor.org/stable/3440009
Page Count: 22
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A Model of University Admission and Tuition Policy
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Abstract

This paper contains an analysis of the admission and tuition policy of a university that maximizes its utility, which depends on the aggregate value of its students and the endowment left for the future. Higher academic ability increases a student's value to the university, while higher tuition decreases the likelihood that an admitted applicant enrolls. The effects of the endowment, the number of applicants, etc., are studied both when applicants differ in their academic ability only, and when applicants also differ in some other aspect, such as parental income, sex, or ethnic origin. The effects of affirmative action are considered.

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