In
terms of higher education, there is little consensus on how to measure or even
define quality because the output (students’ achievement) depends on both
schools’ productivity and students’ ability. Cheng and Tam (1997) concluded
that education quality is a vague and controversial concept because numerous sources
of revenues and influential impacts of universities entail that there are a
large number of stakeholders, all of whom have their own notions of good
quality. For example, faculty members might consider lighter teaching loads and
more capable students as positive signs of a good college while coaches of
varsity teams might think that a good college should be able to attract
promising athlete-students. As Green (1994) rightly put, it is meaningless to talk
about quality unless we have a clear criteria about context and stakeholders.
Quality of higher education is difficult
to measure due to various dimensions of educational products. Like a
manufacturing firm, universities are a system of independent components that
work together to achieve certain goals. Among different goals set by schools,
one consensus is that schools should produce good students. Theoretically, the
best method to assess what college education bestows on students should be
value added measure, namely that we test capabilities of students before and
after graduation and infer the difference as a consequence of college
education. This method, however, is hard to carry through because capabilities
are manifold and sometimes subtle to assess[1].
What’s worse, some consequences of an institution may take years to get
observed, and as time goes by it is difficult to decide whether college
education is the major cause.
A
second method is output measure, namely that we find out the outcomes of a
college education by tracing lifetime performance of graduates of a particular
college. A lot of previous researches use student income as proxy of
performance but their findings are mixed. Brewer, Eide and Ehrenberg (1996),
using data from National Longitudinal of
the High School Class of 1972 and High
School and Beyond, found that after controlling for selection effects,
attending elite private institutions entails significant economic returns.
Similarly, Black, Daniel and Smith (2005) discovered that earning effects of
college quality is economically important and stable for men and women.
However, Dale and Krueger (2002) used College
and Beyond survey and found that graduates of selective institutions,
except those from low-income family, earn about the same as those with
comparable abilities from less selective ones.
Another method is called input measure,
whose punch line is that we infer quality of an institution based on quality of
its inputs. Typical inputs of an institution consist of student body, faculty
members, financial resources, etc. By examining inputs, we can know a school’s
expenditure per student, selectivity of students and capability of faculty
members, which are all important ingredients for providing good students. Input
measure is widely used due to abundance of data, namely U.S Department of
Education’s The Integrated Postsecondary Education Data System (IPEDS). This
approach assumes that better resources translate into better education for
students.
Considering that most postsecondary
institutions in US are not-for-profit organizations, it is normally
unreasonable to assume that they have an incentive to be cautious about using
inputs. However, one justification for this approach is that higher education
market is competitive. Based on classical economic theory, heightened
competition incentivizes market participants to allocate inputs more
efficiently to stay in the game. Black, Daniel and Smith (2005) used input
measure and found that quality of colleges has more impact on graduates than
that of secondary and high schools. They conjectured this was because higher
education market is more competitive. More convincing evidence is provided by
Hoxby (1997), who found that since 1940 the market for baccalaureate education,
transformed from a collection of local autarkies to nationally integrated, has
become significantly more competitive.
This paper defines quality as an institution’s
dedication to instruction because it is the key ingredient of producing good
students, which is mutually agreed as one core mission of higher education. For
research institutions, I will additionally include research expenditure as an
indicator. Some economists (Getz and Siegfried, 1991) criticized the reasoning
that research effort induces higher quality of college education is flawed
because it begs the question that the main purpose of higher education is to
impart frontier knowledge to average undergraduate students. However, I think
that their argument is outdated. Undergraduate students have been more and more
involved in research projects as research assistants, and some reports (Sabatini,
1997, Russell, Hancock and McCullough, 2007) showed that students benefit from
having more communication with faculty members and are more likely to pursue
higher degrees after graduations.
To find out how quality has changed for
different types of postsecondary institutions (i.e. private research
universities, private bachelor colleges, public research universities and community
colleges) from 1990 to 2010, I will study their expenditure profiles, use
regression to discover to what extent does quality related expenditure drive up
the total expenditure, and draw inferences of quality change with respect to
education. Private for-profit universities are not included for two reasons.
Firstly, most for-profit universities have a short history of existence and
their financial reports are incomplete, which makes it impossible to see their
trend of spending. What’s more, for-profit institutions have different
organizational structures and goals from non-profit peers, and we need to come
up with a new model to study them, which is beyond the scope of this paper.
References:
1. Cheng, Y. C. and Tam, W. M.
“Multi-models of Quality in Education,” Quality
Assurance in Education, Vol. 5, No. 1, pp.22-31, 1997
2. Green,
D. What is Quality in Higher Education? Buckingham:
SRHE and Open University Press, 1994
3. Brewer,
Dominic, Eric Eide and Ronald Ehrenberg. “Does It Pay to Attend an Elite
Private College? Cross-cohort evidence on the effects of college type on
earnings.” The Journal of Human Resources,
Vol. 34, No. 1, Winter 1999, pp. 104-123
4. Black,
Dan, Kermit Daniel and Jeffrey Smith. “College Quality and Wages in the United
States.” German Economic Review 2005,
pp. 415-443
5. Dale,
Stacy and Alan Krueger, “Estimating the Return to College Selectivity over the
Career Using Administrative Earning Data.” NBER
Working paper No. 17159, June 2011
6. Hoxby,
Caroline. “How the Changing Market Structure of U.S. Higher Education Explains
College Tuition,” NBER Working paper
No. 6323, 1997
[1]
The output of higher education includes many intangible elements that escape
formal valuation in markets (for example, self-esteem, friendship, maturation,
etc.). In fact, so many of the services of higher education cannot be measured
in physical terms that it is impossible to get a good approximation of their
value.
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