Governments introducing output parameters (e.g. graduation numbers) in the funding rule of universities believe that it will induce universities to raise their teaching efforts while educational standards will remain unaffected. In this article we first show on theoretical grounds that this desire can only be fulfilled if there exist positive…

Applying a three-step methodology on a sample of Belgian college students, an econometric study discovered that students consider two dimensions of their prospective educational choice (economics and "a priori" chances of success) and that poorest students weigh the risk component heavily. Intervention would promote efficiency and…