Template-Type: ReDIF-Paper 1.0
Author-Name:  Eduardo Andrade
Author-Name-First: Eduardo
Author-Name-Last: Andrade
Author-Name:  Rodrigo Moita
Author-Name-First: Rodrigo
Author-Name-Last: Moita
Author-Name:  Carlos Silva
Author-Name-First: Carlos
Author-Name-Last: Silva
Title: Permanent Excess Demand as Business Strategy: An analysis of the Brazilian higher-education Market
Abstract:  Many Higher Education Institutions (HEIs) establish tuition below the equilibrium price to generate permanent excess demand. This paper first builds on Becker’s (1991) theory to understand why the HEIs price in this way. The fact that students are both consumers and inputs on the education production function gives rise to an equilibrium where some firms have permanent excess demand. Second, the paper analyzes this equilibrium empirically. The results show that the HEIs give up 7.6% of the revenue coming from a freshman class in order to have better students and to differentiate themselves as high quality in the market. 
Length:  34 pages
Creation-Date:  2013
Order-URL: https://repositorio.insper.edu.br/handle/11224/7394
File-URL: https://repositorio.insper.edu.br/handle/11224/7394
File-Format: text/html
File-Function: Full text
Number: 177
Handle: RePEc:aap:wpaper:177