Abstract—This research examines the impact of rising college
costs on first-time, full-time resident freshman enrollment and
quality at a large, urban, public teaching university in the time
period 2001-2013. Test results show that freshman enrollment
reacts significantly negatively to full-time tuition and fees, with
the price elasticity surpassing unity in 2012 and 2013.The
steadily increasing education cost has priced out a majority of
incoming freshmen who are in the bottom quarter of their high
school graduating class, student quality raised from punishing
presumably the most economically disadvantaged group. This
study also investigates how the university’s freshman
enrollment responds to tuition and fees charged by its two peers
located on the same campus, a state research institution and a
community college. No competitive threat comes from the
research institution, suggesting that the two universities are in
different market enclaves. In contrast, a weak substitution
effect is documented between the target institution and the
community college. Thus, it is important for the teaching
institution to monitor the community college’s price as well as
its own. In light of President Obama administration’s intention
to make community colleges virtually free of cost, this
realization could not have come at a more critical point.
Index Terms—Freshman enrollment, price elasticity, student
quality, tuition and fees.
Su-Jane Chen is with the Department of Finance, Metropolitan State
University of Denver, Denver, CO 80217 USA (e-mail:
chens@msudenver.edu).
Cite: Su-Jane Chen, "College Costs, Freshman Enrollment, and Student Quality: Evidence from an Urban State University," International Journal of Information and Education Technology vol. 6, no. 9, pp. 664-671, 2016.