How demand works in education

Building the demand curve from first principles — why students choose schools the way consumers choose goods, and what happens when prices, incomes, or tastes shift.

Supply constraints in schools and universities

Seat capacity, faculty lines, and accreditation as supply constraints. Why higher education is slow to adjust — and what that implies for tuition over time.

Equilibrium and the enrollment cliff

What happens when demographic decline shifts the demand curve left — and not all institutions can find a new equilibrium. Market-clearing in real time.

Primary schools and perfect competition

Many sellers, a roughly standardized product, relatively free entry — neighborhood elementary schools as a lens for understanding competitive markets and why they may underprovide quality.

Universities and monopolistic competition

Each institution faces a downward-sloping demand curve for its particular mix of programs, reputation, and campus culture. What that means for pricing, differentiation, and survival when demand shifts.

Spatial models — location, location, location

Hotelling’s model applied to campus geography. Why commuter schools cluster differently than elite national institutions — and what spatial competition predicts about who survives the enrollment cliff.

Mergers, acquisitions, and market concentration

IO theory meets the wave of college closures and campus acquisitions. Using Northeastern’s satellite strategy as a case study in how incumbents extend market power into new geographies.

College as investment: human capital theory

Becker’s framework — education as a durable asset with costs today and returns tomorrow. The rate of return, the discount rate, and why not everyone makes the same calculation.

College as consumption: dining halls, gyms, and the amenities arms race

The part of tuition that is not investment. Why universities compete on recreational facilities and gourmet dining — and what consumer theory says about bundled goods and the student experience.

Signaling vs. human capital: does college teach you, or just sort you?

Spence’s signaling model as an alternative to Becker. If employers cannot observe ability directly, the diploma does the sorting — and that has stark implications for the social returns to education spending.

Externalities and spillovers — why education is undersupplied

The educated neighbor who votes, volunteers, and commits fewer crimes. Positive externalities mean private markets underinvest in education — which is the economic foundation for public subsidy.

Market size and the geography of opportunity

Thin markets, rural deserts, and why small towns cannot sustain four-year colleges. Market size as a binding constraint on what institutions can exist — and what policy might do about it.

Asymmetric information in higher education

Students buying an experience they cannot evaluate for years. How rankings, accreditation, and selectivity emerge as credence signals — and what happens when those signals mislead.

Principal–agent problems on campus

Boards, presidents, faculty, and students — each with different objectives. What principal-agent theory predicts about executive pay, shared governance, and the persistent misalignment of incentives in higher ed.

Tuition pricing and price discrimination

Financial aid as third-degree price discrimination — universities charging each student a different net price based on willingness to pay. How it works, why it is legal, and what it means for access.