Universities’ responses to crises: the influence of competition and reputation on tuition fees

• Published in: Higher education 2021-07, Vol.82 (1), p.61-84
• Main Authors: Civera, Alice, Cattaneo, Mattia, Meoli, Michele, Paleari, Stefano, Seeber, Marco
• Format: Article
• Language: English
• Subjects: College students; Colleges & universities; Competition; Competition (Economics); Crisis Management; Decision Making; Economic crisis; Education; Educational Finance; Educational Researchers; Fees & charges; Higher Education; Influence; International finance; Laws, regulations and rules; Learning; Management; Modern society; Reputation; Reputations; Tuition; Universities; Universities and colleges
• ISSN: 0018-1560; 1573-174X
• DOI: 10.1007/s10734-020-00622-2

Modern societies regularly face crises that have major disruptive effects. Learning from past crises can inform better choices and policies when facing a new one. Following the 2008 global financial crisis, higher education scholars explored its effects on students’ tuition fees through cuts in public funding. This article instead investigates how universities’ decisions on tuition fees have been affected by other factors, beyond the decrease in public funds. As such, it explores the role of competition and reputation in affecting universities’ decisions on tuition fees when facing a crisis. Using data from 59 public Italian universities in the period between 2003 and 2014, we found that universities increased tuition fee by an average of 27% per student in response to the crisis. At the same time, high competition mitigated the increase of tuition fees, except for the case of highly reputed universities, which charged even higher tuition. These findings highlight the importance of monitoring fees in times of crises, as well as the complex role of competition and reputation in containing or inflating university tuition fees.