Elite Price Fixing: Assessing the Competitive Impacts of the 568 Presidents Group Restricted; Files Only

Abstract

The 568 Presidents Group was a consortium of elite, private universities dedicating to promoting need-blind admission policies and emphasizing need-based aid through the adoption of a common methodology for awarding financial aid to students. In January 2022, this group came under scrutiny for allegedly conspiring to fix the prices of college tuition by restricting financial aid awards to students. This paper examines the theoretical mechanisms behind the group's cooperation and estimates its impact on the net costs of college tuition and student enrollment. Using a panel of institutional-level data from 2008-2021, I estimate the group's impact by employing a staggered difference-in-difference approach examining the effect of an institution exiting the 568-group. Results reveal that members of the group restricted financial aid through their common methodology and raised the net costs of tuition, but these changes in cost had little impact on students' decisions to enroll.

Table of Contents

1 Introduction 1

2 A Brief History of the 568 Presidents Group 3

3 Literature Review 9

4 Theoretical Models of Higher Education 12

4.1 Hypotheses of the 568 Presidents Group 14

4.2 Exit and Entry from the 568 Presidents Group 21

5 Data 25

6 Methodology 35

7 Results 44

8 Discussion 52

9 Limitations and Future Work 54

10 Conclusion 56

About this Honors Thesis

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School	Emory College
Department	Economics
Degree	B.A.
Submission	Honors Thesis
Language	English
Research Field	Economics, General Education, Higher Education Administration Economics, Theory
Keyword	antitrust industrial organization financial aid price fixing difference-in-differences college affordability
Committee Chair / Thesis Advisor	Maggie Jones, Emory University
Committee Members	Caroline Fohlin, Emory University Shomu Banerjee, Emory University

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