The Effect of University Costs and Institutional Incentives on Enrolments: Empirical Evidence for Italian Regions

TLDR: In this article, the authors studied the relationship between the enrollment decisions of Italian secondary school graduates and the cost of participating in higher education and found that enrollment costs are determinant in students university choices.

Abstract: We study the relationship between the enrollment decisions of Italian secondary school graduates and the cost of participating in higher education. In particular, we look into the role of incentives, such as scholarship grants, and of the supply of under-priced accommodation which are policy tools in the hands of regional institutes (Enti Regionali per il diritto allo Studio Universitario, ERSU). We provide empirical evidence by estimating a conditional logit model using the survey of 2004 secondary school graduates issued by the Italian Institute of Statistics (ISTAT). We find that enrollment costs are determinant in students university choices: on average, the elasticity of the probability of enrollment to tuition fees is − 0. 062, the one to expected grants is 0. 028, and the one to expected rent is − 0. 022. Differences between regions are considerable: southern regions show lower elasticities, while small central and northern regions exhibit the largest ones.