Essays on Admissions Matching and Associated Outcomes in the Market for Higher Education in ...

155 Pages·2013·1.07 MB·English

The Pennsylvania State University
The Graduate School
College of Education

ESSAYS ON ADMISSIONS MATCHING AND ASSOCIATED OUTCOMES IN THE
MARKET FOR HIGHER EDUCATION IN THE UNITED STATES

A Dissertation in
Higher Education
by
Rodney P. Hughes

© 2013 Rodney P. Hughes

Submitted in Partial Fulfillment
of the Requirements
for the Degree of

Doctor of Philosophy

August 2013
ii

The dissertation of Rodney P. Hughes was reviewed and approved* by the following:

John J. Cheslock
Associate Professor of Higher Education
Dissertation Adviser
Chair of Committee

Roger L. Geiger
Distinguished Professor of Higher Education

Liang Zhang
Associate Professor of Education Policy Studies

Mark J. Roberts
Professor of Economics

David Baker
Graduate Program Coordinator

*Signatures are on file in the Graduate School.
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ABSTRACT
This is a dissertation in three essays. The first essay traces changes over time in three
factors that drive students’ sensitivity to changes in tuition prices and presents an argument that
these factors have changed differently for access to higher education and choice among
alternative institutions. The essay explores the application of a pricing bubble framework to
higher education in an environment in which access has grown less price-sensitive but choice
among institutions has grown more price-sensitive. The second essay outlines the development
and estimation of a nested logistic regression model of demand for higher education that allows
for variation in students’ preferences for institutional characteristics, then illustrates this variation
and demonstrates its importance in predicting students’ enrollment responses to changes in
tuition prices and other institutional characteristics. The third essay relates students’ enrollment
choices to later outcomes including success in degree completion and initial wages in the labor
market, specifically through the lens of the apparent quality of the match between institutional
characteristics and students’ academic qualifications. The essay illustrates several measurement
choices and research design elements that should receive attention from researchers and finds
weak evidence of importance of undermatching and overmatching for later outcomes. A
comprehensive conclusion integrates findings across the three essays and outlines implications
for research and practice.
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TABLE OF CONTENTS

List of Tables……….……….……………………………………………………………v
List of Figures….….…….………………………………………………………………vii
Acknowledgments……….……………………………………………………………..viii

Chapter 1. INTRODUCTION……….…………………………………………………1
Chapter 2. HISTORICAL CONTEXT……………………………….……….………12
References………………………………………………………………………..44
Appendix…………………………………………………………………………49
Chapter 3. ANALYSIS OF ADMISSIONS………….……………………………….50
References……………………………………………………………………..…79
Appendix……………………………………………………………………....…83
Chapter 4. ANALYSIS OF OUTCOMES...………………………………………….84
References………………………………………………………………………127
Appendix……………………………………………………………………..…130
Chapter 5. CONCLUSION………….………………………………………………140
v

LIST OF TABLES
Table 1.1: Annual Percentage Changes in Tuition and Required Fees and Median Household
Income………………………………………………………………………………………..….17
Table 1.2A: Measures of Distributional Spread for Listed Tuition at Private and Public
Institutions …................................................................................................................................21
Table 1.2B: Measures of Distributional Spread for Listed Tuition at Private Institutions .……..21
Table 1.2C: Measures of Distributional Spread for Listed Tuition at Public Institutions ...…….21
Table 2.1: Construction of Choice Set Heterogeneity Across Students……………...….………63
Table 2.2: Institution Types and Institutional Characteristics……………..………….…………67
Table 2.3: Institution Types’ Factor Scores on Non-Academic Characteristics Measures….…..68
Table 2.4: Students’ Expeced Earnings by Gender and Institution Type……………………….69
Table 2.5: Descriptive Statistics for Student-Level Characteristics…….………………….……69
Table 2.6: Institution Types and Student-Level Characteristics…….…………………….……..69
Table 2.7: Regression Results for Level of Institutions (Relative to Four-Year Institutions)…..71
Table 2.8: Regression Results for Choice of Institution Type Among Four-Year Institutions....72
Table 2.9: Marginal Effects Arising from Estimated Demand Model……..……………………75
Table 3.1: Variation in Students’ Academic Qualifications by Predicted Eligibility…………..109
Table 3.2: Students’ Predicted Eligibility and Selectivity of Institutions Actually Attended….110
Table 3.3: Descriptive Statistics for Log Wage and Associated Regressors…………...………112
Table 3.4: Descriptive Statistics for Degree Completion and Associated Regressors…..….….113
Table 3.5: Average Earnings in 2009 by Predicted Eligibility and Institutional Selectivity…...115
Table 3.6A: Wage Results Using Own SAT and Institution SAT……………………………..116
Table 3.6B: Wage Results Using ASVAB and Log Tuition (4-Year Institutions)…………….117
Table 3.6C: Wage Results Using ASVAB and Log Tuition (2- or 4-Year Institutions)…….…117
Table 3.6D: Wage Results Using ASVAB and Selectivity Categories (4-Year Institutions)….118
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Table 3.6E: Wage Results Using ASVAB and Selectivity Categories (2- or 4-Year
Institutions)………………………………………………………..……………………………118
Table 3.7: Completion Rates by Predicted Eligibility and Institutional Selectivity….……...…120
Table 3.8A: Degree Results Using Student Own SAT and Institution SAT……………...……121
Table 3.8B: Degree Results Using ASVAB and Log Tuition (4-Year Institutions)……...……122
Table 3.8C: Degree Results Using ASVAB and Log Tuition (2- or 4-Year Institutions)…..….122
Table 3.8D: Degree Results Using ASVAB and Selectivity Categories (4-Year
Institutions)..............................................................................................................................…122
Table 3.8E: Degree Results Using ASVAB and Selectivity Categories (2- or 4-Year
Institutions)……………………………………………………………………………….….…122
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LIST OF FIGURES
Figure 1.1: Framework for the Determination of Price Sensitivity…………...…………………16
Figure 1.2: Average Pell Grant Awards Over Time as a Percentage of Listed Tuition at Public,
Private, and All Institutions………………………..…………………………………….………19
Figure 1.3A: Loans to Students at Public Institutions………………..…………………...……..25
Figure 1.3B: Loans to Students at Private Not-for-Profit Institutions………………….………..25
Figure 1.3C: Loans to Students at Private For-Profit Institutions……………….……..………..25
Figure 1.4: Return to a Year of Schooling Relative to High School, and Return to a Year of High
School Relative to Nine Years of Schooling………………………….…………………………29
Figure 2.1: Illustration of Nesting Patterns Based on Institution Type for the Nested Logit
Model…………………………………………………………………………………………….61
Figure 2.2: Frequency Distribution of Students’ College Applications in NLSY97 by Term.….65
Figure 2.3: Percentile Distribution of Students’ Taste Coefficients for Non-Academic
Amenities……………………………………………………………………………………..….74
viii

ACKNOWLEDGMENTS

First I am happy to thank my graduate adviser, Dr. John Cheslock, for the best transition
into the world of higher education research that I could have received. I thank Dr. Cheslock for,
at various times, reining me in and letting me go, and for helping me to learn when each one is
appropriate. I also thank my committee members, Dr. Roger Geiger, Dr. Liang Zhang, and Dr.
Mark Roberts, for inspiring many of the ideas to be found in this dissertation and for making the
process of writing (almost) uniformly an enjoyable one. I thank all my committee members for
setting great examples as scholars and as people.
I also thank my parents and my sister for their unending support and for motivating me
first to pursue and then to understand higher education.
Finally, I thank all the friends and colleagues I met along the way at Penn State for a
wonderful ten years of college.
1

CHAPTER 1: INTRODUCTION
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The price to attend higher education institutions represents an obstacle to access for many
students. Annual percentage growth in tuition and fees across institutional types has exceeded
annual percentage growth in median household income since 1980 (Heller, 1997; Hughes, 2011).
Between 1984 and 2008, participation rates rose for all family income quintiles, and between
1975 and 2008, participation rates rose for male and female students and for Black, Hispanic,
and White students, despite rising prices (Baum, Ma, & Payea, 2010). Still, these participation
rates exhibit stratification by income and race/ethnicity, and students’ selection into two- and
four-year institutions exhibits stratification by income (Baum et al., 2010). Access only
illustrates part of the picture; in a study of 1999 high school graduates in North Carolina, Bowen,
Chingos, and McPherson (2009) report students qualified to attend highly selective institutions
enrolling in such institutions had a six-year (four-year) graduation rate of 81% (59%), while
students who undermatched (attended less selective institutions or no institutions at all) had a
66% (44%) six-year (four-year) graduation rate. Bowen et al. (2009) also suggest that declining
to attend selective institutions may introduce costs later in life, such as lower earnings and a
reduced likelihood of earning advanced degrees.
Regardless of their selectivity, institutions have incentives to market themselves and
enroll the best students they can attract. Despite decades of rising tuition and fees, institutions
continue to rely on tuition and fees to generate revenue. Public institutions have faced
appropriations reductions, and market volatility has reduced the stability of endowment income,
while health care and retirement costs continue to rise (Kiley, 2011a; Lewin, 2010; Kiley, 2011b;
Keller, 2010). In order to generate tuition revenue, institutions must invest in programs,
services, and financial aid to entice students to attend. These institutional marketing efforts may
add clarity to students’ reasons for undermatching, which to this point have focused on students’