The Role Of Irrational Exuberance In Rising Tuition Prices
Open Access
Author:
Myra, Clinton Jacob
Area of Honors:
Finance
Degree:
Bachelor of Science
Document Type:
Thesis
Thesis Supervisors:
Sajay Samuel, Thesis Supervisor James Alan Miles, Thesis Honors Advisor
Keywords:
tuition prices higher education decision model tuition increases student debt
Abstract:
This paper explores the possibility that “irrational exuberance” on the part of students contribute to the large tuition increases in higher education over the last three decades. I examine this thesis by using a decision model to capture the costs and benefits to a student of obtaining a college degree. I use SAT scores as a proxy for future earnings to evaluate the alternatives and opportunity costs for students. Using a sensitivity analysis for select variables in the decision model helps provide further indication of what factors have the greatest impact on the decision presented to students.
