Price Effects of Nonprofit College and University Mergers

Lauren Russell
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Lauren Russell: Fels Institute of Government, University of Pennsylvania

The Review of Economics and Statistics, 2021, vol. 103, issue 1, 88-101

Abstract: Nonprofit colleges and universities have merged across the United States citing economies of scale and scope. Yet whether these mergers raise prices has not been empirically assessed. Using a retrospective merger evaluation approach, I estimate that the average merger between 2000 and 2015 increased tuition and fees by 5% to 7% relative to nonmerging institutions in the same state and sector (public or nonprofit). Effects on net prices are estimated imprecisely, but the results are suggestive that nonprofit colleges use mergers to increase price discrimination.

Date: 2021
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