Post-secondary fees and the decision to attend a university or a community college

This paper examines the effect that post-secondary fees have on a potential student's decision to start his or her college education at a university or a community college. A theoretical model demonstrates that the student's decision follows a natural ordering that depends on his or her probability of graduation. Based on this natural ordering, ordered probit is used to estimate the effect of interstate variation in fees on student attendance. The results indicate that the own-price effects of fee increases are negative while the cross-price effects are positive. (C) 1998 Elsevier Science S.A.