Economic Analysis Of Elite Higher Education

1619 Words Mar 21st, 2016 7 Pages
Economic Analysis on Elite Higher Education in California

Introduction

Higher education is a critical mechanism for individual socioeconomic advancement and an important driver of economic mobility. A well-educated workforce is vital to our nation’s future economic growth. American companies and businesses require a highly skilled workforce to meet the demands of today’s increasingly competitive, global economy. Higher education is provided through a complex public-private market, with many different types of individuals and institutions participating. Federal government has supported higher education by establishing the American Opportunity Tax Credit, expanding income-based repayment for student loans, and freezing the interest rate on subsidized student loans. This analysis has been focused on elite public colleges and universities in the state of California. Hereafter I refer higher education institutions.
Demand and Supply Elasticity of higher education

Before defining supply and demand in the higher education framework, it is important to note that the market for higher education is very different from the market for wheat or any other good. Most notably, one of the biggest differences between the wheat market and the higher education market is that prices do not ration one’s access to the goods in the higher education market. The wheat market does not care who ends up buying the wheat, but universities care a great deal about the students who attend their…
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