Determinants of Willingness-to-Pay for Tuition Fee of a Private Technical Higher Education Institution in Indonesia

Sri Nadapdap, Yosef Manik

2018

Abstract

Tuition fee is a critical decision variable for families who plan to send their children for college. For any purchase decision, there is a difference between the ability to pay (ATP) and the willingness to pay (WTP). While ATP depends on income, families’ assets, and other information related to families’ wealth, WTP is determined by how families’ perceived the value proposition provided. In Indonesia, no studies has been published in identifying factors that affect the WTP for tuition of higher education institution. Such information, however, is essential for higher institution, particularly private institutions, to pursue a pricing strategy that is tailored to the target students. This study is aimed to measure the WTP and to identify factors affecting the WTP of prospective students’ parents for tuition fee of a private technical higher education institution in Indonesia (PT X). This study was conducted between January and March 2018. Using questionnaire that was distributed in several districts and cities that became target area of PT X, 215 respondents who have the potential to send their children to PT X have been queried about their WTP and factors that affect the WTP. The median of WTP found in this study is Rp 5.000.000,-. Over seven hypothetical variables, this study found that family income is the only significant variable that affects the WTP. The outcome of this study will be used for better formulate both pricing strategy and financial planning for governing bodies of PT X.

Paper Citation

in Harvard Style

Nadapdap S. and Manik Y. (2018). Determinants of Willingness-to-Pay for Tuition Fee of a Private Technical Higher Education Institution in Indonesia. In Proceedings of the 3rd International Conference of Computer, Environment, Agriculture, Social Science, Health Science, Engineering and Technology - Volume 1: ICEST, ISBN 978-989-758-496-1, pages 420-423. DOI: 10.5220/0010044004200423

in Bibtex Style

@conference{icest18,
author={Sri Nadapdap and Yosef Manik},
title={Determinants of Willingness-to-Pay for Tuition Fee of a Private Technical Higher Education Institution in Indonesia},
booktitle={Proceedings of the 3rd International Conference of Computer, Environment, Agriculture, Social Science, Health Science, Engineering and Technology - Volume 1: ICEST,},
year={2018},
pages={420-423},
publisher={SciTePress},
organization={INSTICC},
doi={10.5220/0010044004200423},
isbn={978-989-758-496-1},
}

in EndNote Style

TY - CONF

JO - Proceedings of the 3rd International Conference of Computer, Environment, Agriculture, Social Science, Health Science, Engineering and Technology - Volume 1: ICEST,
TI - Determinants of Willingness-to-Pay for Tuition Fee of a Private Technical Higher Education Institution in Indonesia
SN - 978-989-758-496-1
AU - Nadapdap S.
AU - Manik Y.
PY - 2018
SP - 420
EP - 423
DO - 10.5220/0010044004200423