A Study On Higher Education Tuition Elasticity In China

In recent years, with the pace of the popularization of higher education in China accelerated, the development of higher education in China entered a new stage. Tuition standards were slow to adjust. Gradually, increase in education funding couldn't catch up with the pace of popularization. Fiscal pattern in China's Universities has been changed; with the demographic changes, the proportion of people in higher education is increasing, and the demand for higher education in China is evolving. For colleges and universities, the tuition is an important part of cost sharing of higher education, as the price of higher education, it also plays a role in regulating demand, guiding the consumer of higher education- students and their families- to make rational choice. In this paper, we study the tuition elasticity in Chinese higher education, which is examining how tuition affects the choice of students for university, thus affecting the demand of higher education by data analysis.With some innovative discovery, the research design of this paper is as follows: first, we discussed the theoretical basis of elasticity of research and tuition fees, reviewed the policy changes of higher education in China and summarized the key points of tuition policy and change of tuition data, laying the foundation for tuition elasticity measurement. Then we conducted a questionnaire survey for high school seniors to study tuition elasticity. Findings suggest that a small part of students can not afford college tuition, they need to rely on student loans for college. Meanwhile, tuition may affect universities choices of students, students from poor families are more significantly affected by tuition on those choices, and in higher demand for subsidy. Proving the existence of tuition elasticity in reality is a contribution in this research field of this paper. Thirdly, based on relevant research about higher education demand, we constructed a regression model to estimate the tuition elasticity in higher education, regression results indicate that change in China's higher education demand is inelastic to "real tuition", and tuition elasticity is greater than subsidy elasticity, which is a new finding by a new researching method in this area.The following chapter studyed regional differences in tuition and tuition elasticity. Cluster analysis of panel data is used to analyze regional differences in tuition burden, and 31 provinces are divided into four categories in different tuition burden. Through contrast, it is found out that the tuition growth in most of eastern provinces is obvious, but in general the tuition burden is lower; the tuition increase in some provinces in the central region is more obvious, hence, provinces with heavier tuition burden account for half the proportion; burden of tuition fees is heavier in most western provinces. Study about the relationship between tuition growth and tuition burden between different regions is a precedent in this research field, which is also one of the contributions of this paper. Finally, on the basis of clustering results, we established panel data model of tuition elasticity to explore regional differences of tuition elasticity by grouping different provinces with different tuition burden. Results shows that the heavier the tuition burden the more elastic the demand of higher education is, although the gap is not obvious; in province where aid fund grows faster, tuition elasticity is significantly smaller. Research of tuition elasticity under different tuition burden is another research achievement of this paper. In the end, based on the research result stated above, we offer proposals for the development of higher education, tuition policy reform and the balance of higher education development in different regions.