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Muhammad Irwan Ariffin (MA Economics) – “An Insight into Student Demand for Higher Education in US” This paper explores the determinants of domestic undergraduate students’ enrollment in US universities. The main interest of this study is to look at student price response in higher education by developing a student demand model. Data for this study are taken from the publicly available IPEDS database and Times Higher Education ranking. The sample set consists of 120 universities across US from 2005 to 2010. Domestic students’ enrollments are expected to be negatively related with domestic tuition fees but positively related with financial aid, and tuition fees charged by competitors. Several other variables are introduced to control university‐
level effects such as quality of education, campus location, control type, admission tests scores, and popularity among domestic and foreign students. Yearly dummy variables will be used to control for business cycle effects and other macro variables fluctuations. To check the possibility that domestic tuition fees are endogenously determined by students’ enrollment, a preliminary investigation using 2‐step GMM will be implemented with out‐of‐state tuition fees and admission rate as instruments. The panel nature of the data allows for estimation of Fixed Effect models and Random Effect models. To control for possible correlation between some of the explanatory variables and unobservable university‐level effects, Hausman‐Taylor models will also be estimated. The model selection procedures involve performing Hausman Tests and overidentifying restriction tests on these alternative panel models. The result from these tests can be used to estimate the price elasticity of education among domestic students.