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This paper develops a model for the discrete stochastic dynamics of economic inequality-induced 	outcomes in education and demonstrates, in the context of the Turkish higher education sector, that higher 	incomes lead to higher performance levels; and hence income inequality matters. The paper formulates	 a stochastic subsidy policy that could help the sector to escape the low performance equilibria, and that 	 could stabilize the sector at relatively higher performance levels

Discrete Stochastic Dynamics of Income Inequality in Education: An Applied Stochastic Model and a Case Study