Fraser Forum

Do students value university? Tuition speaks louder than survey responses

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On a scale of one to 10, how much do you like this blog? Before you answer let me mention that the more you say you like it the more we’re going to ask you to pay for it.

Just kidding. We’re not going to ask you to pay for it no matter what you say. And the request for your rating of it is actually rhetorical. If we did ask, we hope you’d all say “10,” maybe even “11.” But we’re not really asking.

Why ask that rhetorical question (he asks, rhetorically)? To illustrate part of what’s known as “the public-goods problem.” We’d like to subject even goods that can’t be provided in markets to market-like tests. If we’re thinking about building another lighthouse or buying another fighter-jet (which in fact Ottawa is currently considering), it would be great to know exactly how much people benefit from these things. If we did know that, we could add up the benefits across all the people who do benefit and then compare the sum of benefits with the purchase’s costs, which are pretty easy to figure out: All we do is ask lighthouse and fighter-jet suppliers for a quote. If the aggregated benefits exceed the costs by a sufficient margin, the purchase may make sense. It’s market-like, but not actually a market.

All this comes to mind because of a story this week in the Financial Times about a boycott by students at Oxford and Cambridge and other top-level British universities of a government survey into the quality of teaching at U.K. universities. According to the story, written by the FT’s Sarah O’Connor, the boycotting students had several motivations but one was precisely the fear that if they replied to the survey by saying teaching was good, that would result in higher fees—just as if you gave this blog a ten, you might end up paying more to read it. In the event, response rates at a dozen universities, including Oxford and Cambridge, were below the 50 per cent required for the survey results to be published.

I suspect most students who refused to participate for reasons other than apathy or disinterest or because they had better things to do were mainly objecting on principle to raises in tuition and what they regard as the “commodification” of education. Many on the Left just don’t want market processes involved in education (or health care or many other things) simply because they think markets are immoral. And they won’t participate in any activity that in any way encourages them.

But there’s a more systematic problem with surveys designed to judge people’s willingness to pay: If people know their answer may affect the final tax-price or in this case tuition-price of the good they’re being asked about, they can game the system by not telling the truth. If an Oxford student says Oxford teaching is just terrible (and it may be: Adam Smith, who spent six unhappy years there in the 1740s, thought it was), that reduces the likelihood Oxford tuition will rise. Diss your university and pay less. It doesn’t work unless most students do it, and students may be hard to organize, but the possibility of this kind of gaming reduces the value of any information a market-like survey generates.

According to the FT, the National Union of Students opposed the survey and encouraged a boycott because (it said) the government was “manipulating student feedback to create a false market and justify fee rises.” It’s interesting that the NUS opposes a false market. That seems to suggest it might support a true market, though I’m pretty sure it wouldn’t. A true market really would elicit information about the quality of teaching—or of whatever it is students value in their university education (camaraderie, networking, career prospects, partying, genuine intellectual development). That’s what markets do: generate information about people’s preferences for things. In a true market, you have to honestly reveal your preferences. If you don’t pay the price charged for them, you don’t get the goods. If you do pay, we can infer that you value them at least as much as you did pay.

In a market system of education, schools that students valued more would charge higher tuition (if they wanted to, that is: they might choose to operate on a charitable basis). Schools that students valued less could only charge lower tuition. If Oxford students thought Oxford was terrific, they couldn’t game the tuition system by claiming it wasn’t. If they didn’t pay the high tuition, they wouldn’t get in. They might claim what they were getting was useless. But money talks louder than survey responses.

Lighthouses and fighter jets are goods we all consume together, however much each of us likes them. Schooling is different. We can all consume different amounts. Schooling may be something that for other reasons the public sector wants to be interested in. But it’s not a “public good.” If we really do want to find out how much students value it, a market would be a good way to find out.


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