A Small Note on Higher Education Fees
Today at Warwick Economics Summit there was a debate on higher education fees, and one of the participants asked whether the fees should be determined based on the costs of each student or the expected salary of the graduate (as the private benefit from the degree is the expected increase in the salary.) Actually, the fees are determined by both! The cost is reflected by the supply curve, and the expected salary (utility) makes up the demand curve.
P.S. Pratik's analysis on the need for raising the cap on variable fees, and the political economy of higher education reform (i.e. the need to explain the reform to students and parents to make sure that the proposal is politically feasible, and even more importantly, that people can utilize the system to its utmost potential once it is implemented.)