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Online course enrolment and tuition: empirical evidence from public colleges in Georgia, USA

In the USA, higher education has witnessed substantial increases in tuition levels and online course offerings. In an effort to estimate the demand for online courses, this study collected institutional-level enrolment data during four academic years (2010-2011 through 2013-2014) from 22 colleges within the University System of Georgia (USG). The results indicate that: 1) the demand for online courses is price-elastic (a 10% increase in online tuition rates reduces online credit hours by 15-18% when the effect of traditional course tuition rate is not controlled, and by 30-36% when this effect is controlled); 2) online credit hours increase 1.0 to 1.3 times more than overall student enrolment; 3) online courses and traditional courses are shown to be substitutes, rather than complements.