College as Country Club: Do Colleges Cater to Students' Preferences for Consumption? / Brian Jacob, Brian McCall, Kevin M. Stange.

Format:

Book

Author/Creator:

Jacob, Brian.

Contributor:

National Bureau of Economic Research.

McCall, Brian.

Stange, Kevin M.

Series:

Working Paper Series (National Bureau of Economic Research) no. w18745.

NBER working paper series no. w18745

Language:

English

Physical Description:

1 online resource: illustrations (black and white);

Place of Publication:

Cambridge, Mass. National Bureau of Economic Research 2013.

Summary:

This paper investigates whether demand-side market pressure explains colleges' decisions to provide consumption amenities to their students. We estimate a discrete choice model of college demand using micro data from the high school classes of 1992 and 2004, matched to extensive information on all four-year colleges in the U.S. We find that most students do appear to value college consumption amenities, including spending on student activities, sports, and dormitories. While this taste for amenities is broad-based, the taste for academic quality is confined to high-achieving students. The heterogeneity in student preferences implies that colleges face very different incentives depending on their current student body and the students who the institution hopes to attract. We estimate that the elasticities implied by our demand model can account for 16 percent of the total variation across colleges in the ratio of amenity to academic spending, and including them on top of key observable characteristics (sector, state, size, selectivity) increases the explained variation by twenty percent.

Notes:

Print version record

January 2013.