Price Regulation, Price Discrimination, and Equality of Opportunity in Higher Education: Evidence from Texas
Open accessAbstract
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. (JEL D63, H75, I22, I23, I24, I28, I32)
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Improvements in institutional resources combined with well-designed aid programs can lead to improved postsecondary access even when sticker prices go up.
“Evidence suggests that improvements in institutional resources, combined with well-designed aid programs, can lead to improved postsecondary access even when sticker prices go up (Andrews & Stange, 2019;Murphy, Scott-Clayton, & Wyness, 2019).”
From College Costs, Financial Aid, and Student Decisions (2022) · cites this paper as Andrews & Stange, 2019
The opening passage and Conclusion report that increased grant aid and program resources helped low-income students access higher-earning Texas university programs despite higher sticker prices. The Conclusion also says the changes were concentrated in students’ choice of institution, rather than whether they enrolled in college at all. The source therefore supports improved access to particular postsecondary opportunities, not a general increase in postsecondary enrollment. (LLM, conf=0.83)
Experimental — accuracy not yet measuredTuition deregulation led to both increases in need-based aid and increases in program quality.
“They find evidence that tuition deregulation led to both increases in need-based aid and increases in program quality, both of which could contribute to improvements in access for low-income students.”
From College Costs, Financial Aid, and Student Decisions (2022) · cites this paper as Andrews and Stange (2019)
The Texas tuition deregulation had no effect on overall enrollment for poor students, and actually increased enrollment of poor students at higher-quality programs.
“Yet the change had no effect on overall enrollment for poor students, and actually increased enrollment of poor students at higherquality programs (despite larger price increases for these programs).”
From College Costs, Financial Aid, and Student Decisions (2022) · cites this paper as Andrews and Stange (2019)
After Texas deregulated public university tuition prices, tuition prices increased substantially overall, as did the variation in tuition prices across programs.
“Tuition prices increased substantially overall, as did the variation in tuition prices across programs.”
From College Costs, Financial Aid, and Student Decisions (2022) · cites this paper as Andrews and Stange (2019)
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- Authors
- Andrews, R. J., & Stange, K. M.
- Affiliations
- The University of Texas at Dallas (US)
- University of Michigan (US)
- ORCID
- Stange, Kevin M.
- Venue
- American Economic Journal: Economic Policy
- Publisher
- American Economic Association
- Published
- 2019-11-01
- Volume
- 11
- Issue
- 4
- Pages
- 31-65
- ISSN
- 1945-7731 (ISSN-L)
- 1945-774X
- OpenAlex
- W2560029666
- Cited by
- 35
- References
- 32
- Citations by year
- 2025: 4 · 2024: 3 · 2023: 8 · 2022: 10 · 2021: 3 · 2020: 5 · 2019: 1 · 2018: 1
- FWCI
- 12.82
- Type
- journal article
- Language
- en
- Open access
- bronze
- doi.org
- Locations
- American Economic Journal Economic Policy (publishedVersion)
- RePEc: Research Papers in Economics (submittedVersion)
- Funders
- Russell Sage Foundation
- Spencer Foundation
- Sage Foundation
- Texas Education Agency
- Texas Higher Education Coordinating Board
- Topics
- Social Sciences › Education › Higher Education Research Studies
- Social Sciences › Education › School Choice and Performance
- Social Sciences › Sociology and Political Science › Intergenerational and Educational Inequality Studies
- Keywords
- price discrimination, price regulation, low-income students, higher education access, equal opportunities, public universities, tuition setting, grants, college major choice, Texas higher education
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