Price Discrimination in Higher Education: An Alternative for Finland?

Abstract

This thesis is a literature review that sets out to explore price discrimination in the context of higher education tuition fees. As Finland has seen a downfall in the global higher education rankings (Opetus- ja kulttuuriministeriö, 2022c), the local Ministry of Finance issued a statement proposing a wider deployment of tuition fees (Valtiovarainministeriö, 2022). Based on this background, I apply the existing empirical and theoretical literature to the Finnish higher education market. First, the thesis builds the foundation for understanding price discrimination and personalized pricing, and then it examines the necessary conditions related to implementing price discrimination. Following this, I discuss some of the issues related to using personalization as a pricing scheme, outline some of the possible outcomes, and assess the ability of personalized tuition fees to achieve the objectives of the Ministry of Finance. In brief, I find that applying price discrimination in the higher education system of Finland has the potential to improve the institutions’ financial standing, but further research is needed to initiate the implementation process and to evaluate, for example, the ability of personalized tuition fees to help in achieving non-financial objectives of higher education.