Pricing and university autonomy: Tuition deregulation in Texas

Jeongeun Kim, Kevin Stange

Research output: Contribution to journalArticlepeer-review

16 Scopus citations


This paper investigates changes in tuition policies in the wake of tuition deregulation in Texas, which in 2003 transferred tuition-setting authority from the state legislature to institutions. We find that price increases accelerated, particularly at the most selective institutions. Institutions also began differentiating price by undergraduate program, raising relative prices for the most costly and lucrative majors, including engineering, business, nursing, and architecture. Price increases were particularly large for institutions with the highest initial costs and for programs with a high earnings premium within institutions, though lower for institutions with more low-income students. These distinctions suggest that public postsecondary institutions respond to microeconomic incentives when given greater autonomy to set price, and take some measures to alleviate impacts on low-income students. The Texas experience suggests that decentralized price-setting generates greater price differentiation within the public higher education system, both across and within institutions.

Original languageEnglish (US)
Pages (from-to)112-146
Number of pages35
Issue number1
StatePublished - Apr 2016


  • College pricing
  • Deregulation
  • Differential tuition
  • Tuition

ASJC Scopus subject areas

  • Social Sciences (miscellaneous)


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