The Crisis of Higher Education : An Economic Approach to Strategic Issues

In this paper, I will examine the current crisis in higher education in the United States by studying the history of the American economy’s effect on colleges and universities, evaluating different existing financial models, and assessing the current and future supply and demand of the industry. Examining trends in population and career/vocational paths across generations will help to better understand the challenges that lie ahead for colleges and university. I will be creating a Cournot model to evaluate how colleges and universities can stay competitive within highly saturated markets and meet prospective students’ financial needs. Many factors are involved in a college’s enrollment strategy that extend beyond pure economics. However, this research intends to provide a base equation for colleges and universities sharing the challenge of decreased enrollment. The goal is that the formula created will prove to be a starting point for colleges to set an enrollment minimum based on only the economic principals of Cournot. This approach requires the college or university to truly examine themselves and their competitors to adjust their offerings with fluctuating class sizes. This research will focus on Elizabethtown College as a case study, using its competitors to create the equation