The Department for Education commissioned Alma Economics to provide robust evidence on the factors influencing demand for higher education in England, with a particular focus on the price elasticity of demand among domestic and international students. 

A major focus of the work was estimating how international student demand responds to tuition fees while addressing methodological challenges around the relationship between fees and enrolment decisions. 

To tackle this, Alma Economics developed an innovative panel instrumental variable approach, drawing on exchange rate movements and changes in student demand across countries to identify the impact of fees on student choices. The analysis used more than two decades of data on student enrolments, tuition fees, university finances, and wider economic and policy factors. 

The published findings show that international student demand is generally price-inelastic, although responsiveness varies across student groups and institutions. Demand for higher-ranked universities was found to be significantly less sensitive to price changes than demand for lower-ranked institutions. 

The research has informed the Department for Education's published International Student Levy Impact Analysis, helping to strengthen the evidence base for understanding how international student demand responds to fees and other policy changes. 

Read the full report here.