have your college and eat it too: consuming education

Today, I want to make what, to my economics-ish friends, are probably some painfully obvious points. However, I had never explicitly considered this angle on college/education before taking economics of education last semester, and I suspect that it’s something many others of even my rather intelligent friends and colleagues have also failed to consider in depth.

The value of education is not purely as an investment. Education also provides some degree of consumption value.

This observation kind of throws a wrench in human capital theory, because it will be difficult to decide whether certain forms of education spending were worth it in the absence of information about the value that that education had to students in virtue of merely consuming it, apart from any job they subsequently got or whatever. The consumption value of education is subjective, and will vary widely from person to person. But the fact that education’s consumption value is difficult, or impossible, to observe and measure does not give us good reason to ignore it.

The consumption value of education came to my mind frequently as I recently read “Academically Adrift: Limited Learning on College Campuses.” Throughout the book, the authors stress that college students today emphasize the social value of college to an extreme degree, some of them going so far as to say that the relationships that they form and experience in college are significantly more important than anything they may learn in the classroom. Unfortunately, gaining extensive social experience in college is, to some extent, at odds with performing well academically: for instance the authors show that, while participating in a fraternity or sorority may improve academic performance somewhat, studying in groups is less effective than studying alone. And, because our time is finite, hours spent socializing are mostly hours spent not studying, reading, or writing, activities which occupy less of college students’ time today than in the recent past, apparently to their detriment.

Now, socializing at college may itself have some investment value, particularly at elite colleges (i.e., “it’s not what you know, it’s who you know”). But college students engage in many social activities simply because they are enjoyable. As such, social opportunities and experiences constitute much of the consumption value of going to college, and students self-report that this is a very important aspect of college life to them. Yet, practically daily now there is a story in every major news outlet, describing the shock, frustration, anger, and sadness of college graduates upon realizing that they are unable to trade their college credentiala for a high-paying job, or even any job (here’s an example from the NYT).

My assessment of the situation: Stuff doesn’t acquire investment value just because you want it to. Students and parents realize, on some level, that the value of college consists to a large extent in consumption. This is why they speak frequently of the college “experience” and make college decisions taking things like sports, dorms, and dining hall food into account. But then, when it’s time for the degree to hit the fan and for interested parties to see what kind of investment value that expensive education really had, they are unable to bite the bullet and admit that college is greatly about consumption.

Notice that another aspect of the consumption value of education consists in students’ simply enjoying attending classes (your author is the queer sort of creature who often enjoys it immensely) and partaking in other academic experiences available only through institutionalized education. This should be kept in mind when we think about students’ decisions to attend graduate school and pursue careers in academia, despite the dismal job prospects. Many of the requisite educational expenditures should be understood as (maybe) overpaying for educational experiences, rather than as failed investments.

10 Comments

  • “Like”

    Also, this thought had crossed my mind as an undergraduate in economics. All too often, I find the ideas I have are not novel… someone has already beaten me to all the low-hanging fruit.

    It occurs to me now, though, that graduate students probably consume education more than undergrads (not in the social sense, in the sense that they enjoy learning). You probably have to like school more than average to stomach a graduate education.

  • @Jeffrey-

    Yep, I think you’re right re: graduate education. Although there will be differences across types of programs. It would be easier to understand the actions of someone who pursued graduate work in the sciences or maybe law even if they didn’t particularly enjoy school because these are degrees that do often pay off financially, with significant returns on investment. It makes way less sense to find a graduate student in the humanities who both hates school and is not particularly well-positioned to find a decent job upon graduation. Doing grad school under those circumstances is a good choice only if you actually enjoy and find value in doing the work, I think.

  • Excellent – a basic point but not often made. Is this a purely private good I wonder?

  • My understanding of empirical analysis of the matter (i.e., pecuniary returns on educational investments) is that, while there’s some compelling case to be made that lower education is a public good (in a sense), that this case largely dissolves at the college & graduate level. Most of the returns on those educational expenditures accrue to private individuals and therefore probably shouldn’t be subsidized by the state.

  • Oh absolutely, the evidence is also pretty strong that secondary education (at least as now organised) doesn’t have significant spillover effects either. I was rather thinking of what the implications for public argument would be if it became widely accepted that college education was mainly a consumption good consisting of having a really good time. Here in the UK that might have quite an impact…

  • Ah. I’m not sure, I can see it affecting public debate in a few different ways. I will give it some thought and write about it next week, stay tuned!

  • It’s striking how much our metaphors shape public debate and opinion. Examples in education that immediately come to mind: consumption vs. investment, garbage can model, receiving vs. constructing knowledge, the system is broken (and thus needs to be fixed), etc. Our metaphorical frames definitely affect how we decide on which facts are relevant and how we act. http://bit.ly/fA4IDU

  • Zac Gochenour wrote:

    Even with all the fun to be had, a lot of people hate college. A lot hate it so much that they drop out, even when their parents are covering their tuition. I think the consumption value is pretty low when you account for how much people hate actual schoolwork.

    Furthermore, I think the human-capital investment is nonexistent. Signaling is the real story in education. So a move towards things that students enjoy more (socializing versus classwork) is actually efficiency-enhancing.

  • pamela wrote:

    Oh sure, many people hate the actual schoolwork, but many also still get the warm fuzzies about the “college experience” – moving out for the first time, making friends, Greek life, etc etc. Demands for even better services, facilities, and amenities at colleges even as academic achievement erodes is evidence that this is part of what people understand themselves to be voluntarily buying. Schoolwork is hardly even required for many classes and many degrees. All of this is consistent with a signaling explanation for the value of education, to which I am largely sympathetic.

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