Lauren Russell (MIT) will present:
"Market Power Effects of College and University Mergers"
at 3pm on Wednesday, January 25, 2017 in 310 Silsby

Please sign up for a meeting or lunch at:

https://docs.google.com/spreadsheets/d/1q8ExEbOG5FPGC_3rQnFJOIjcD8bnX7OfCM09nQ2pSVA/edit?usp=sharing


Abstract


Colleges and universities across the US have merged to cut spending, citing economics of scale and scope. However, these mergers may facilitate market power, increasing costs for students. Using a national panel of public and private non-profit institutions, I characterize mergers between 2001 and 2013 involving public and private non-profit institutions and find that the average merger increases tuition and fees by 7% relative to non-merging institutions in the same state. Price effects are largest for mergers involving institutions with many of the same degree programs pre-merger and those operating in the same commuting zones. I investigate and rule out three alternative explanations for price increases: higher costs, higher quality, and new degree offerings. The evidence is consistent with broad exercise of market power in higher education.





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