Determinants of University Tuition in Japan

The main purpose of this study is to find the factors involved in determining private university tuition level. Furthermore, we test whether or not university tuition of prestigious (higher standard deviation score) private universities is lower than that of less prestigious private universities. Japanese researchers have drawn conflicting conclusions about this issue. We obtain the following results. First, important factors affecting tuition are (i) the size of university (i.e. the number of attending students), (ii) the quality of the university (i.e. standard deviation scores), (iii) urban and competition factors (i.e. the inverse of HHI), and (iv) subsidies to private universities. Second, empirical results show that university tuition is higher at very prestigious universities, a tendency similar to that in the US. Third, bigger university size and greater availability of subsidies tend to reduce the tuition level.