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ERIC Number: EJ1093298
Record Type: Journal
Publication Date: 2016
Pages: 31
Abstractor: As Provided
ISSN: ISSN-0276-8739
Marginal Pricing and Student Investment in Higher Education
Hemelt, Steven W.; Stange, Kevin M.
Journal of Policy Analysis and Management, v35 n2 p441-471 Spr 2016
This paper examines the effect of marginal price on students' educational investments using rich administrative data on students at Michigan public universities. Marginal price refers to the amount colleges charge for each additional credit taken in a semester. Institutions differ in how they price credits above the full-time minimum (of 12 credits), with many institutions reducing the marginal price of such credits to zero. We find that a zero marginal price induces a modest share of students (i.e., 7 percent) to attempt up to one additional class (i.e., three credits) but also increases withdrawals and lowers course performance. The analysis generally suggests minimal impacts on credits earned and the likelihood of meeting "on-time" benchmarks toward college completion, though estimates for these outcomes are less precise and more variable across specifications. Consistent with theory, the effect on attempted credits is largest among students who would otherwise locate at the full-time minimum, which includes lower-achieving and socioeconomically disadvantaged students.
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Publication Type: Journal Articles; Reports - Research
Education Level: Higher Education; Postsecondary Education
Audience: N/A
Language: English
Sponsor: Institute of Education Sciences (ED); Department of Education (ED)
Authoring Institution: N/A
Identifiers - Location: Michigan
IES Funded: Yes
Grant or Contract Numbers: R305B110001