Assignment 8 - colleges and universities. Wealthy...

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ECO 544 Assignment 8 1. The last column (price/cost ratio) is the proportion of the student’s educational costs covered by the student’s payment, approximately the ratio of column 4 to column 3. The schools are ranked by decile according to the subsidies per student shown in column 2. This ranking is almost consistent with the price/cost ratio in column 5. The most striking fact in this table is the uneven distribution of that average subsidy; that is, the wide range of subsidies that are supported by differences in the donative resources available to different
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Unformatted text preview: colleges and universities. Wealthy institutions have far more donative resources with which to subsidize their students than do poor ones. The average school in the top decile gives each student a subsidy of nearly $22,800 a year from donative resources to support a $28,500 education - while the average school at the bottom gives each student a $1,800 subsidy to help pay for a $7,900 education. One result is that the student at the bottom actually pays a higher net dollar price than the student at the top....
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