An Empirical Analysis of the Consequences of Major Choice Using Texas Administrative Data


Summary

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Publications

Price Regulation, Price Discrimination, and Equality of Opportunity in Higher Education: Evidence from Texas

Rodney J. Andrews and Kevin Strange. 2019. "Price Regulation, Price Discrimination, and Equality of Opportunity in Higher Education: Evidence from Texas." American Economic Journal: Economic Policy, 11 (4): 31-65.

Abstract

We assess the importance of price regulation and price discrimination to low-income students' access to opportunities in public higher education. In 2003, Texas shifted tuition-setting authority away from the state legislature to public universities themselves. In response, most institutions raised sticker prices and many began charging more for high-earning majors, such as business and engineering. We find that poor students actually shifted toward higher earning programs following deregulation, relative to non-poor students. Deregulation facilitated more price discrimination through increased grant aid and enabled supply-side enhancements, which may have partially shielded poor students from higher sticker prices.

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