This chapter uses diagrams and narration to illustrate how economists utilize models of decision making behavior to analyze higher education policies. Models of the behavior of decision-makers consider their goals and the constraints they face in pursuing those goals. Many higher education policies influence the constraints—on income, information or time—that decision-makers face, and economics provides analytical frameworks that are particularly useful for understanding and evaluating the effectiveness of such policies. The chapter details how human capital theory—the most widely-used theoretical framework in economics of education—and a model of the market for investment in higher education are applied to analyze higher education policies regarding student access. The presentation is intended as an introduction to economic models and higher education policy analysis for scholars, administrators, and policymakers who are not trained in economics, but would like to understand how economics can be used to analyze higher education policy.
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Paulsen, M.B., Toutkoushian, R.K. (2008). Economic Models and Policy Analysis in Higher Education: A Diagrammatic Exposition. In: Smart, J.C. (eds) Higher Education. Handbook of Theory and Research, vol 23. Springer, Dordrecht. https://doi.org/10.1007/978-1-4020-6959-8_1
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