Merit scholarships are no quick fix for college quality

Before college leaders undertake what may be a costly endeavor, they may wish to appraise the likely success of an academic merit scholarship program. This research presents a methodology for assessing the potential success of such a program. We first develop and estimate a model of college choice that specifically accounts for price/quality tradeoffs among the colleges to which an individual has applied and been admitted. The model is then used to simulate the changes in the probability of enrollment at the institute corresponding to changes in merit scholarships. Finally, the costs of a merit program are calculated.