Student's Willingness to Pay for Degree Program Based on Attributes

Higher education offerings are evolving, and institutions are challenged with providing a grouping of services, or attribute set, with the highest value to students. Widening course offerings may present additional financial challenges to higher education institutions if the magnitude of the value of specific course attributes is unknown. In this study, students were surveyed to determine the willingness to pay for degree program attributes with respect to amount of time and location commitment, university reputation, degree program reputation and instructor reputation. Using a choice-based approach, marginal utilities are calculated along with willingness to pay measures for each variable. Results suggest that the largest premiums occur when time and location commitments are minimized, followed by a solid university reputation. Implications for higher education institutions may allow for customized pricing policies and efficient course offerings based on demand for the most valued structure of online delivery modes, and reputations of degree programs, instructors, and the institute of higher education. Course offerings could then be tailored to balance student demand and institutional resources.