The effects of University Costs and Institutional Incentives on Enrolments: empirical evidence for Italian Regions

We study the relationship between the enrolment decisions of Italian secondary school graduates and the cost of participating in higher education. In particular, we look into the role of incentives, such as scholarship grants and the supply of underpriced accommodation, that are policy tools in the hands of regional institutes (Enti Regionali per il diritto allo Studio Universitario, ERSU). We provide empirical evidence by estimating a conditional logit model mainly using the data from the Italian Institute of Statistics (ISTAT) survey of secondary school graduates in 2004. We find that the enrolment costs play a major role in students university choices: the elasticity of the probability of enrolment to tuition fees is $-0.062$ for the average region, the one to expected grants is 0.028 and the one to expected rent is -0.022. Differences between regions are quite marked: southern regions show lower elasticities, while small central and northern regions the largest ones.