Symposium on the Industrial Organization
of Higher Education
JOHN J. SIEGFRIED
Department of Economics, Vanderbilt University, Nashville, TN 37235-1819, USA.
At the inaugural International Industrial Organization Conference of the
Industrial Organization Society, I organized a session on the ‘‘Competitive
Forces in Higher Education’’. Four papers were presented, by the authors
included in this symposium. Three of these symposium papers, by John
Kwoka and Christopher Snyder, Malcolm Getz and myself, and Susanne
Warning are revised versions of the conference presentations. The fourth
paper included here, by Gordon Winston, is an alternative paper that we
deemed a better ﬁt into this published symposium. The four papers that
follow consider product diﬀerentiation among colleges and universities, entry
and exit into the US higher education market, the sensitivity of capital
investment decisions to the relative price of capital goods, and the impor-
tance of strategic choices for the relative eﬃciency of German universities.
The conference was held at Northeastern University on April 4 and 5,
2003. Lawrence J. White (New York University) presided. Joseph Quinn
(Boston College), Richard Caves (Harvard University), James Meehan
(Colby College), and Andrew Eickelpasch (DIW Berlin) were discussants of
the Winston, Kwoka and Snyder, Getz and Siegfried, and Warning papers,
respectively. After the conference, each of the papers included here was
In the ﬁrst paper included here, Gordon Winston categorizes 1581 US
colleges and universities in terms of a hierarchy that reﬂects each institution’s
spending on educational resources, its prices charged to students, and the
implicit subsidy the average student receives, i.e. the diﬀerence between
spending per student and average net tuition charged per student. Because
virtually all institutions charge students less than the cost of producing the
education they receive, the subsidies are always positive. Winston argues that
diﬀerentiation among institutions in terms of subsidy per student is
increasing over time. He then considers various criteria that might be useful
for deciding whether there is too much, too little, or just the right amount of
diﬀerentiation among American colleges and universities in terms of their
expenditures per student.
Review of Industrial Organization 24: 329–330, 2004.
Ó 2004 Kluwer Academic Publishers. Printed in the Netherlands.