An Analysis of economic determinants and the related effects on the price elasticity of enrollment demand in four year public institutions of higher education in North Carolina /

Abstract

In the current research, logarithm transformations were utilized for several measures since they produce constant elasticities for the related factors. There are alternative methodologies that can be utilized. Some of these alternatives are addressed including: (1) the Probit model; and (2) the Logit model. The difference between the Logit and Probit models is in the assumptions made regarding the error term. If the error term has a logistic distribution, we have the Logit model. If it has a normal distribution, we have the Probit model. The descriptive results proved to be very similar. All hypotheses were confirmed.

Multiple linear regression was used to model several sets of determinants across different levels of analysis. A cross-sectional design was used in this research. Therefore, the resultant demand models were descriptive only of the time period covered in these analyses. Nevertheless, such research should be useful in assessing the impact on enrollments of selected demand factors and in determining the efficacy of the investment approach applied in this research.

The purpose of this research was to model the demand for higher education and to determine if enrollments were price elastic among North Carolina's public four-year institutions. The underlying intent was to check the feasibility of a human capital theory based methodology for examining the demand dependency of higher education in North Carolina institutions of higher education. The price elasticity of enrollments were observed across various institutional groupings to observe the differential effects of these factors given institutional characteristics. The analyses were based upon the investment approach to human capital theory relative to the study of educational demand.