What’s Happened to the Price of College? Quality Adjusted Net Price Indices for Four Year Colleges
Journal of Human Resources. 2004, Vol. 39, No. 3, pp. 723-45.
Schwartz, A.E. & Scafidi, B.P.
In this paper we estimate hedonic models of the (consumer) price of college to construct quality-adjusted net price indexes for U.S. four-year colleges, where the net price of college is defined as tuition and fees minus financial aid. For academic years 1990-91 to 1994-95, we find adjusting for financial aid leads to a 22 percent decline in the estimated price index for all four-year colleges, while quality adjusting the results leads to a further, albeit smaller, decline. Nevertheless, public comprehensive colleges, perhaps an important gateway to college for students from low-income backgrounds, experienced the largest net price increases.