ecn152-lecture18

ecn152-lecture18 - Economics152: EconomicsofEducation...

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Economics 152:   Economics of Education Professor Scott Carrell Lecture 19:  College Attendance
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Overview of Today’s Lecture • Why are there disparities in college going by  income? – Expense? Information? Motivation? – First generation college goers – Evidence from Boston COACH program • What interventions may work to increase  college going? • Overview of VT study currently underway
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Why Qualified Students Don’t  Go… • Human Capital Model implies…  – Go if MC=MB – Model assumes perfect information • Students may over estimate tuition costs and  underestimate the financial returns to college – Kane and Avery (2004) find students overestimate  both costs and benefits
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Why Qualified Students Don’t  Go… • Students may display hyperbolic discounting  (Laibson (1997) – Short sighted in making their decisions – Benefits increased earnings are possibly four years  away  • Behavioral Bias – People have a strong tendency to stick with the  default option – For many…peers, siblings, and/or parents did not  attend or did not complete college
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Why Qualified Students Don’t  Go… • Tuition Costs/Debt Aversion – Most studies find that a $1,000 increase in tuition  results in a 3-7 percentage point decrease in college 
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This note was uploaded on 03/18/2011 for the course ECN 152 taught by Professor Carrell during the Spring '11 term at UC Davis.

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ecn152-lecture18 - Economics152: EconomicsofEducation...

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