Tuesday, May 3, 2011

Tuition Differences Across Programs?

There appears to be an increasing trend toward "differential tuition" of college courses.
According to Nelson, 18 institutions have adopted differential tuition based on academic programs in the past three years. Nelson, then a financial officer for the Oregon University System, studied the issue while earning his doctorate from UNL in 2008.

What is not clear is the economic cause. Does this merely represent differences in marginal costs as Art and Humanities professors and their office equipment cost much less than Engineering and Science professors and their lab equipment? Or does it reflect differences in demand as the future earnings in the Arts and Humanities are so much lower than in Engineering and the Sciences? I note that Business students tend to pay more despite the lack of expensive equipment.
Business and engineering are the two programs most frequently subject to higher tuition rates, Nelson found. On average, the 2008 study found that business students pay 14 percent more tuition at colleges that have adopted differential tuition policies; engineering students pay 15 percent more.

Hat tip to Mark Perry


  1. They propose taxing engineers (which our country needs more of) to subsidize poets (which our country, sadly, does not). They're maximizing the private good (number of students) instead of the social good (productivity of students).

    Either they'll get fewer engineers and more poets, or at best the school will capture a larger share of the engineer's lifetime earnings. Neither are good for society.

    If the university was paid with equity, ie, a 5% share of the individual's lifetime earnings, I can't imagine something this backwards would occur.

  2. I concur with Mathew. It sounds to me like the school is trying to use better market segmentation to reap more monopoly-like profits. They already do this wrt the student's ability to pay (a..k.a: need based financial aid) and ability to chose a different school (a.k.a.: merit scholarships), so this new move doesn't come at much surprise.

  3. Obtaining a MBA degree is determined by demand-supply.
    When it comes to studying for a MBA it increases your value considerably because an MBA candidate is highly respected within the business and management sectors. As with most university tuition fees the benefits of studying for an MBA is just like a business investment, can you predict the kind of return on investment you will expect to see. The benefits are not only monetary but you can benefit from knowledge and experience from the professors.
    Learning has change because of technology. One can obtain an MBA by online or by the traditional means, classroom lectures. As technology develops, course materials can be obtained through online bookstores, Kindles, iPads and other computerized devices. The business schools reflect this fee in their tuition that students expect and are willing to pay.

    Suzette Monteverde, Empire State College, Dr. Singh, ECO-65155X