The Demand for Legal Education

Abstract

Although the demand for education is usually treated as human capital and thus as an investment good, some researchers have examined the consumption value of education. In 1998, we examined the demand for medical education using both a basic human capital model and an augmented human capital model with the results supporting the former. Our research into the demand for legal education expands this approach, using the number of LSAT exams administered each year as a proxy for law school demand. In addition to the human capital variables, our augmented model includes the standard variables of a traditional demand model—income and a substitute good (medical education)—as well as a political environment dummy variable. We estimate this model in both static and dynamic form. As with the demand for medical education, analysis shows that human capital variables, but not consumption variables, influence the demand for legal education. (I21, J24)