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Financing Higher Education: A General Equilibrium Public Choice Approach*
Author(s) -
CREEDY JOHN,
FRANCOIS PATRICK
Publication year - 1993
Publication title -
economic record
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.365
H-Index - 42
eISSN - 1475-4932
pISSN - 0013-0249
DOI - 10.1111/j.1475-4932.1993.tb01793.x
Subject(s) - externality , economics , budget constraint , public good , interdependence , voting , public economics , government (linguistics) , microeconomics , constraint (computer aided design) , general equilibrium theory , public expenditure , outcome (game theory) , public finance , macroeconomics , political science , mathematics , linguistics , geometry , politics , law , philosophy
A public choice approach is used to examine the level of a tax‐financed grant chosen by a cohort, allowing for a wide range of interdependencies, including the goverment's budget constraint The existence of an externality is necessary, but not sufficient, for support of a grant It is shown that a majority voting equilibrium exists. Comparative static analyses are carried out using a minimum of assumptions about the structure of the model An increase in government expenditure for non‐higher education purposes is associated with an increase in the preferred grant while an increase in private returns to education reduces the grant