Estimating the Market Demand and Elasticity for Enrollment at an Institution

This article presents an applied research framework that can be helpful in tuition and net price policy discussions. It is the classic microeconomic concept of market demand applied to enrollment management in higher education. The policy relevance includes measuring a response to price. For example, the results of this model will allow the enrollment manager to determine the percentage change in enrollment from a given percentage change in tuition.

This article presents the steps to develop an empirical market demand curve to answer the question of how much enrollment changes when specific factors change. The data used in this approach is available at most institutions. Data is analyzed using ordinary least squares regression, and policy recommendations are made based on these empirical findings. The approach can be replicated with institutional data and staff with basic skills in regression analysis.