Does Price Matter? Overseas Students in UK Higher Education

This paper explores the determinants of the choice of UK universities by overseas undergraduate applicants. We use data on overseas applicants in Business Studies and Engineering from 2002 to 2007, to 97 UK universities. Estimating using a Hausman-Taylor model to control for the possible correlation between our explanatory variables and unobservable university-level effects, we find that the fees charged may influence the application decision of some students, but that any relationship between levels of fees and applications is non-linear. The quality of education provided is positively and significantly related to the number of applications. Proximity to London and the existing popularity of a university among home applicants, are also significant predictors of university applications. (Contains 2 figures and 6 tables.)