Elasticity of demand for tuition fees at an institution of higher education

Abstract

Using a conjoint survey of 161 students at South Dakota State University (SDSU), we mapped a probability-of-enrolment curve for SDSU students, consistent with demand theory. A quasi-demand curve was created from the conditional-logit model. This study shows that along with the price of tuition fees, distance from home, availability of majors, and family and friend connections to the school have significant effects on a student’s decision to attend SDSU. From these results, we found that for enrolments at SDSU, the price elasticity of demand for tuition fees turns elastic around the $9000 price point.

Keywords:

• conditional-logit model
• conjoint survey
• elasticity of demand
• higher education