Rate of Return to and Price of Higher Education in Turkey: A Case Study of Law Faculty

Abstract

The fact that higher education service provides important benefits for individuals and society has resulted in excess demand. This is directly related to a simple economic law suggesting that the demand for goods or services of which price is zero or low will increase until its marginal benefit approximates zero or very close to zero. However, it seems that demand and supply of education is difficult to determine based on the demand-supply and price equilibrium included in economic theory. Investment decision depends on the reciprocal influence of three components; anticipated earnings, cost of the investment and the current interest rate. The higher education having the characteristics of an investment is influenced by these three components. In the study, the price of higher education, with the reciprocal influence, and individual demand of higher education are analyzed within the framework of the sample of Law Faculty. In the conclusion part, it is suggested that the price of higher education is significantly below 1 and this increases the demand of higher education.