ITEM METADATA RECORD
Title: Reducing product diversity in higher education
Authors: Kelchtermans, Stijn
Verboven, Frank
Issue Date: 2007
Publisher: K.U.Leuven, Faculty of Economics and Applied Economics : Department of Economics
Series Title: CES - Discussion Paper Series (DPS) 07.26 pages:1-34
Abstract: Public systems of higher education have recently attempted to cut costs by providing financial incentives to institutions who reduce the diversity of their programs.

We study the profit and welfare effects of reducing product diversity in higher education, against the background of a funding system reform in Flanders (Belgium). We find that dropping duplicated programs at individual institutions tends to be socially undesirable, due to the limited fixed cost and variable cost savings and the students’ low willingness to travel to other institutions. Furthermore, we find that the financial incentives offered to drop programs may be very ineffective, leading to both undesirable reform and undesirable status quo. These findings emphasize the complexities in regulating product diversity in higher education, and serve as a word of caution towards the various decentralized financial incentive schemes that have recently been introduced.
Publication status: published
KU Leuven publication type: IR
Appears in Collections:Department of Managerial Economics, Strategy and Innovation (MSI), Leuven
Research Center of Econometrics, Leuven
Research Centre for Globalization, Innovation and Competition, Campus Brussels (-)
Faculty of Economics and Business (FEB) - miscellaneous

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