Determinants of Tuition Prices in Private Universities of Mexico: A Panel Data Analysis at the State Level 2005-2019

Abstract Objective: Estimate a supply and demand model of private college education services in Mexico for the 2005-2019 period, in order to identify the factors that influenced the dynamics of their equilibrium prices. Methodology: The methodology consists of estimating such models with two- and three-stage least squares using panel data at the state level. Results: The results suggest that while the contribution of demand variables to the inflation of such prices has been positive and fairly stable, that of supply variables, even though it has been more fluctuating, it has also been larger than the contribution of the former throughout the entire period. Limitations and implications: It bounds the discussion on the role associated with private universities own characteristics as well as market structure due to lack of disaggregated information at private institution level. Originality and value: This paper contributes to the literature on the subject in Mexico by providing the first estimates of supply and demand elasticities for private higher education. Conclusions: Based on these estimates, it was possible to identify the dynamics of the equilibrium prices of tuition fees at private universities in Mexico and their relationship with both supply and demand factors.