Economics
321 --- Economics of Reed College
Fall
2009
Jeffrey
Parker & Jon Rivenburg
Readings
Readings marked with an asterisk (*) are not required. They are included
for those who wish to pursue selected topics in more detail. Some readings (as
noted) will be assigned to individual class members (or groups) but not to the
entire class. In addition to these "academic" readings, students will
be provided with institutional reports and data on Reed and other colleges as
the course proceeds. The instructors are also likely to send a barrage of incidental
articles of relevance from the Chronicle of Higher Education and other
sources your way.
Many of the readings in the list are available on the
Internet. Most of these will have links directly to the reading. Note that most
of these are available through online subscriptions that can be accessed only
if you are connecting through the Reed network. It is possible that some of the
links to/through various library collections may not be stable. If you encounter
difficulty getting the link to work from this page, go to the ejournals link on
the Reed Library home page and search for the journal title. You should be able
to find an electronic copy of the paper that way.
Week 1: September
2 and 3
Introduction to the Economics of Reed College
A discussion
of the class and of the basic economics of our college. In what markets does Reed
participate and what is the extent of these markets? Where does Reed get its money
and where is it spent? In what ways is Reed similar to and and in what ways is
it different from other colleges?
Assignment
due Thursday, September 3: Complete ASQ form (handed out Wednesday evening)
Week
2: September 9 and 10
The Economics of Higher Education
Sources and
uses of funds within liberal-arts colleges and other institutions of higher education.
Trends in institutional finances.
All students read for Wednesday:
- Kirp,
David L. 2003. Shakespeare, Einstein, and the Bottom Line: The Marketing of
Higher Education. Cambridge, Mass.: Harvard University Press
- Chapter
2: "Nietzsche's Niche".
- Fain, Paul. 2007. Antioch's
Closure Signals the End of an Era. Chronicle of Higher Education 53
(42), June 22.
- Clotfelter, Charles T. 1999. The
Familiar but Curious Economics of Higher Education: Introduction to a Symposium.
Journal of Economic Perspectives 13 (1):3-12.
- Winston, Gordon C.
1999. Subsidies,
Hierarchies, and Peers: The Awkward Economics of Higher Education. Journal
of Economic Perspectives 13 (1):13-36.
- Rothschild, Michael, and Lawrence
J. White. 1995. The
Analytics of the Pricing of Higher Education and Other Services in Which the Customers
are Inputs. Journal of Political Economy 103 (3):573-586.
- Winston,
Gordon C. 2003. Toward a
Theory of Tuition: Prices, Peer Effects, and Competition in Higher Education.
Williams Project on the Economics of Higher Education Discussion Paper DP-65.
Presented
and discussed by individual students on Wednesday:
- Sallee,
James M., Alexandra M. Resch, and Paul N. Courant. 2008. On
the Optimal Allocation of Students and Resources in a System of Higher Education.
B.E. Journal of Economic Analysis & Policy 8 (1: Advances):Article
11. [Cori, Erik, Lars]
- MacLeod, W.
Bentley, and Miguel Urquiola. 2009. Anti-Lemons:
School Reputation and Educational Quality. Cambridge, Mass.: National Bureau
of Economic Research, Working Paper No. 15112. [Russell, Renée]
All
students read for Thursday:
- Winston, Gordon C., and David J. Zimmerman,
"Peer Effects in Higher Education," in C. Hoxby, ed., College Choices:
The Economics of Where to Go, When to Go, and How to Pay for It, (Chicago:
NBER and University of Chicago Press, 2004), Chapter 9. (Working
paper version available online.)
- Parker,
Jeffrey, James Grant,
Jan Crouter, and Jon Rivenburg. 2008. Classmate
Peer Effects: Evidence from Core Courses at Three Colleges. Portland, Ore.:
Reed College.
Presented and discussed by individual
students on Thursday:
- Carrell, Scott E.,
Richard L. Fullerton, and James E. West. 2008. Does
Your Cohort Matter? Measuring Peer Effects in College Achievement. Cambridge,
Mass.: National Bureau of Economic Research. NBER Working Paper No. 14032. [Onyeka,
Cori, Renée]
- Stinebrickner, Ralph,
and Todd R. Stinebrickner. 2008. The
Causal Effect of Studying on Academic Performance. B.E. Journal of Economic
Analysis & Policy 8 (1: Frontiers):Article 14. [Renée, Erica,
Russell]
- Lyle, David S. 2007. Estimating
and Interpreting Peer and Role Model Effects from Randomly Assigned Social Groups
at West Point. Review of Economics and Statistics 89 (2):289-299. [Lars,
Tim, Niko]
Week 3: September 16 and 17
College
Productivity and Liberal-Arts Colleges
The "technology"
of "production" and "productivity" in higher education. What
is distinctive about liberal-arts colleges? What are the survival challenges faced
by small colleges?
All read for Wednesday
- Massy, William
F. 1996. Resource Allocation in Higher Education. Ann Arbor, Mich.: University
of Michigan Press.
- Chapter 3: Productivity Issues in Higher Education
- Breneman,
David W. 1994. Liberal Arts Colleges: Thriving, Surviving, or Endangered?
Washington D.C.: Brookings Institution Press.
Presented and discussed
by individual students on Wednesday:
- Vedder, Richard. 2004. Going
Broke By Degree: Why College Costs So Much. Washington D.C.: American Enterprise
Institute Press
- Chapter 1: The Cost Explosion [Bobby, Tim, Erica]
- Chapter
2: Why Are Universities Inefficient and Costly? [Erica, Lars, Cori]
- Chapter
3: Productivity Decline and Rent-Seeking [Russell, Onyeka, Erik]
- Johnson,
Nate. 2009. What
Does a College Degree Cost? Comparing Approaches to Measuring 'Cost per Degree'.
Delta Cost Project White Paper Series. Washington, D.C.: Delta Cost Project. [Erik,
Bobby, Onyeka]
Thursday: Discussion
of Staffing Reduction Assignment
Week 4: September 23 and
24
Human Capital and the Demand for Higher Education
The benefits
of higher education and of elite higher education. Is it worth it? Does it matter
what your major is?
All read for Wednesday:
- Becker,
William E. 1992. Why Go to College? The Value of an Investment in Higher Education.
Chapter 4 in W.E. Becker and D.R. Lewis, eds., The Economics of American Higher
Education. Boston: Kluwer Academic Publishers.
- Goldin, Claudia, and
Lawrence F. Katz. 2007. The Race between
Education and Technology: The Evolution of U.S. Education Wage Differentials,
1890 to 2005. Cambridge, Mass.: National Bureau of Economic Research Working
Paper No. 12984. (This is an earlier version of Chapter 8 from the authors' 2008
book, The Race between Education and Technology, Cambreidge, Mass.: Harvard
University Press.)
- Cohn, Elchanan, and Terry G. Geske. 1992. Private Nonmonetary
Returns to Investment in Higher Education. Chapter 7 in W.E. Becker and D.R. Lewis,
eds., The Economics of American Higher Education. Boston: Kluwer Academic
Publishers.
Papers on return to majors, to be presented and discussed
by individual students on Wednesday:
- Berger, Mark C. 1992. Private
Returns to Specific College Majors. Chapter 6 in W.E. Becker and D.R. Lewis, eds.,
The Economics of American Higher Education. Boston: Kluwer Academic Publishers.
[Cori, Tim, Erik]
- Freeman,
James A., and Barry T. Hirsch. 2008. College
Majors and the Knowledge Content of Jobs. Economics of Education Review
27 (5):517-535. [Erik, Russell, Renée]
- Del
Rossi, Alison F., and Joni Hersch. 2008. Double
Your Major, Double Your Return? Economics of Education Review 27 (4):375-386.
[Erica, Renée, Onyeka]
Papers on return to
elite higher education, to be presented and discussed by individual students on
Thursday:
- Eide, Eric, Dominic Brewer, and Ronald Ehrenberg. 1998.
Does
It Pay to Attend an Elite Private College? Evidence on the Effects of Undergraduate
College Quality on Graduate School Attendance. Economics of Education Review
17 (4):371-376. [Bobby, Tim, Lars]
- Brewer, Dominic, Eric Eide,
and Ronald Ehrenberg. 1999. Does
It Pay to Attend an Elite Private College? Cross-Cohort Evidence on the Effects
of College Type on Earnings. Journal of Human Resources 34 (1):104-123.
- Thomas, Scott L., and Liang Zhang. 2005. Post-Baccalaureate
Wage Growth within Four Years of Graduation: The Effects of College Quality and
College Major. Research in Higher Education 46 (4):437-459. [Erica,
Russell, Tim]
- Zhang, Liang. 2005. Do
Measures of College Quality Matter? The Effect of College Quality on Graduates'
Earnings Review of Higher Education 28 (4):571-596.
- Long,
Mark C. 2008. College
Quality and Early Adult Outcomes. Economics of Education Review 27
(5):588-602. [Tim, Erik, Onyeka]
- Dale, Stacy Berg, and Alan
B. Krueger. 2002. Estimating
the Payoff to Attending a More Selective College: An Application of Selection
on Observables and Unobservables. Quarterly Journal of Economics 117
(4):1491-1527. [Lars, Cori, Russell]
Week 5: September
30 and October 1
The Demand for Liberal-Arts Colleges
What determines
where students apply and attend? How do economic factors such as tuition and financial
aid affect enrollment decisions?
Due on Wednesday, September 30:
Assignment: Admission Dean for a Day
All students read these basic
demand papers for Wednesday:
- Becker, William E. 1990. The Demand
for Higher Education. Chapter 7 in S.A. Hoenack and E.L. Collins, The Economics
of American Universities. Albany, N.Y,: State University of New York Press.
- Neill, Christine. 2009. Tuition
Fees and the Demand for University Places. Economics of Education Review
28 (5):561-570.
- Buss, Christian, Jeffrey Parker, and Jon Rivenburg,
"Cost,
Quality, and Enrollment Demand at Liberal-Arts Colleges," Economics
of Education Review 23(1), January 2004, 57-65.
Papers on
effects of financial aid, to be presented and discussed by individual students
on Wednesday:
- Moore, Robert L., A. H. Studenmund, and Thomas Slobko.
1991. The Effect of the Financial Aid Package on the Choice of a Selective College.
Economics of Education Review 10 (4):311-321. [Renée,
Bobby, Erica]
- Avery, Christopher, and Caroline M. Hoxby. 2004. Do
and Should Financial Aid Packages Affect Students' College Choices? Chapter 6
in C. Hoxby, ed., College Choices: The Economics of Where to Go, When to Go,
and How to Pay for It. Chicago: NBER and University of Chicago Press. (Working
paper version available online.) [Tim, Cori, Bobby]
- Linsenmeier,
David M., Harvey S. Rosen, and Cecilia Elena Rouse. 2006. Financial
Aid Packages and College Enrollment Decisions: An Econometric Case Study.
Review of Economics and Statistics 88 (1):126-145. [Onyeka, Lars, Cori]
- Monks,
James. 2007. The
Impact of Merit Based Financial Aid and Price Illusion on College Enrollment:
A Field Experiment. Ithaca, N.Y.: Cornell Higher Education Research Institute
Working Paper No. 101. [Russell, Erik, Renée]
Thursday
visitor: Kristine Sawicki, Acting Dean of Admission.
Week 6:
October 7 and 8
Minority Access and Diversity
What are the goals
of affirmative action policies? What are the legal constraints? What is the track
record of affirmative action?
All read for Wednesday:
- Bowen,
William G., and Derek Bok. 1998. The Shape of the River: Long-Term Consequences
of Considering Race in College and University Admissions. Princeton, N.J.:
Princeton University Press
- Chapter 1: Historical Context
- Chapter
2: The Admissions Process and "Race-Neutrality"
- Chapter 3: Acadmic
Outcomes
- Chapter 9: Informing the Debate
- Chapter 10: Summing Up
To
be presented and discussed by individual students on Wednesday:
- Hill,
Catherine B., and Gordon C. Winston. 2006. How Scarce Are High-Ability, Low-Income
Students? In M.S. McPherson and M.O. Schapiro, College Access: Opportunity
or Privilege? New York: College Board.
- Griffith,
Amanda L., and Donna S. Rothstein. 2009. Can't
Get There from Here: The Decision to Apply to a Selective College. Economics
of Education Review 28 (5):620-628.
Thursday:
Discussion of Admission Assignment.
Week 7: October
14 and 15
Institutional Admission and Financial-Aid Policies
How
institutions design enrollment and financial-aid policies to attract the desired
group of students within their budgets.
All read for Wednesday:
- Wilkinson,
Rupert. 2005. Aiding Students, Buying Students: Financial Aid in America.
Nashville, Tenn.: Vanderbilt University Press.
- Chapter 1: Setting the
Record Straight
- Chapter 2: Aid in History: Who Got It, What Shaped It
- Chapter
7: Choosing the Best
- Chapter 8: New Strategies
- McPherson,
Michael S., and Morton Owen Schapiro. 1998. The Student Aid Game: Meeting Need
and Rewarding Merit in American Higher Education. Princeton, N.J.: Princeton
University Press.
- Chapter 9: Student Aid as a Competitive Weapon
- Chapter
10: Merit Aid
- Chapter 11: The Institutional Perspective
- Chapter
12: The Student Perspective
- Chapter 13: Conclusion: Merit Aid---Good or
Bad?
- Griffith, Amanda L. 2009. Keeping
Up with the Joneses: Institutional Changes Following the Adoption of a Merit Aid
Policy. Ithaca, N.Y.: Cornell Higher Education Research Institute, Working
Paper No. 120.
- Golden, Daniel. 2006. The Price of
Admission: How America's Ruling Class Buys Its Way into Elite Colleges---and Who
Gets Left Outside the Gates. New York: Three Rivers Press.
To
be presented and discussed by individual students on Wednesday:
- Avery,
Christoper, and Jonathan D. Levin. 2009. Early
Admissions at Selective Colleges. Cambridge, Mass.: National Bureau of Economic
Research Working Paper No. 14844.
- Hill, Catherine B., Gordon C.
Winston, and Stephanie A. Boyd. 2005. Affordability:
Family Incomes and Net Prices at Highly Selective Private Colleges and Universities
Journal of Human Resources 40 (4):769-790.
- Bound, John, Brad Hershbein,
and Bridget Terry Long. 2009. Playing
the Admissions Game: Student Reactions to Increasing College Competition.
Cambridge, Mass.: National Bureau of Economic Research, Working Paper No. 15272.
- Golden,
Daniel. 2006. The Price of Admission: How America's Ruling Class Buys Its Way
into Elite Colleges---and Who Gets Left Outside the Gates. New York: Three Rivers
Press.
- Chapter 1: How the Z-List Makes the
A-List
- Chapter 2: Recruiting the Rich
- Chapter
9: The Challenge of Wealth-Blind Admission
Thursday
visitor: Leslie Limper, Director of Financial Aid
Week 8: October
28 and 29
College Fund-Raising
Who contributes to colleges like Reed?
All read for Wednesday:
To be presented and discussed by individual
students on Wednesday:
Thursday
visitor: Hugh Porter, Vice President for College Relations
Week
9: November 4 and 5
College Endowment Management
What is the endowment
and how is it managed? How does it contribute to Reed's revenue stream?
All
read for Wednesday:
- Ehrenberg, Ronald G. 2000. Tuition Rising:
Why College Costs So Much. Cambridge, Mass.: Harvard University Press
-
Chapter 3: Endowment Policies, Development Policies, and the Color of Money
- Massy,
William F. 1996. Resource Allocation in Higher Education. Ann Arbor, Mich.:
University of Michigan Press.
To
be presented and discussed by individual students on Wednesday:
- Merton,
Robert C. 1993. Optimal Investment Strategies for University Endowment Funds.
Chapter 7 in C.J. Clotfelter and M. Rothschild, eds. Studies of Supply and
Demand in Higher Education. Chicago: National Bureau of Economic Research
and University of Chicago Press. Read pp. 211-218 only.
- Lerner,
Josh, Antoinette Schoar, and Jialan Wang. 2008. Secrets
of the Academy: The Drivers of University Endowment Success. Journal of
Economic Perspectives 22 (3):207-222.
Thursday visitor:
Edwin McFarlane, Vice-President and Treasurer.
Week 10: November
11 and 12
Faculty Salaries and Tenure
What determines the structure
of faculty salaries across and within institutions and fields? What economic issues
are raised by academic tenure?
All read for Wednesday:
- Ehrenberg, Ronald G. 2000. Tuition Rising: Why College Costs So Much.
Cambridge, Mass.: Harvard University Press.
- Epstein,
David. 2005. "Watch
Out for the New Guy," Inside Higher Education, July 27.
- Chait,
Richard P. 2002. Why Tenure? Why Now? In R.P. Chait, ed., The Questions of
Tenure. Cambridge, Mass.: Harvard University Press.
- McPherson, Michael
S., and Gordon Winston. 1993. The Economics of Academic Tenure. Chapter 5 in M.
S. McPherson, M. O. Schapiro, and G. C. Winston, eds., Paying the Piper: Productivity,
Incentives, and Financing in U.S. Higher Education. Ann Arbor, Mich.: University
of Michigan Press.
To be presented and discussed by individual
students on Wednesday:
- Ehrenberg, Ronald G., Marquise McGraw, and
Jesenka Mrdjenovic. 2006. Why
Do Field Differentials in Average Faculty Salaries Vary across Universities.
Economics of Education Review 25 (3):241-248.
- Monks, James, and
Michael Robinson. 2001. The
Returns to Seniority in Academic Labor Markets. Journal of Labor Research
22 (2):415-427.
- Link, Albert N., Christopher A.
Swann, and Barry Bozeman. 2008. A
Time Allocation Study of University Faculty. Economics of Education Review
27 (4):363-374.
- Ashenfelter, Orley, and David Card. 2002. Did
the Elimination of Mandatory Retirement Affect Faculty Retirement Flows?
American Economic Review 92 (4):957-980.
Thursday visitor:
Peter Steinberger, Dean of the Faculty
Week 11: November 18
and 19
Making and Implementing College Budgets
How does the college
make decisions and implement them through its budget policy?
All
read for Wednesday:
- Tuckman, Howard P., and Cyril F. Chang. 1990.
Participant Goals, Institutional Goals, and University Resource Allocation Decisions.
Chapter 3 in S.A. Hoenack and E.L. Collins, eds. The Economics of American
Universities: Management, Operations, and Fiscal Environment. Albany, N.Y.:
State University of New York Press.
- James, Estelle. 1990. Decision Processes
and Priorities in Higher Education. Chapter 4 in S.A. Hoenack and E.L. Collins,
eds. The Economics of American Universities: Management, Operations, and Fiscal
Environment. Albany, N.Y.: State University of New York Press.
- Meisinger,
Richard J. 1995. College and University Budgeting: An Introduction for Faculty
and Academic Administrators, 2nd ed. Washington, D.C.: National Association
of College and University Budget Officers
- Chapter
1: Introduction
- Chapter 3: The Budget Process,
pp. 49-77
- Chapter 4: Allocating Resources
and Increasing Flexibility (omit pp. 135-143)
-
Chapter 5: Retrenchment and Reallocation: Fiscal Issues
- Appendix:
Approaches to Budgeting
- Curry,
John R. 2004. Budgeting. In Managerial Analysis and Decision Support: A Guidebook
and Case Studies. Washington, D.C.: National Association of College and University
Budget Officers. (Pp. 29-83)
- Anthony, Robert N., and Regina E.
Herzlinger. 1980. Management Controls in Nonprofit Organizations. Homewood,
Ill.: Richard Irwin.
- Chapter 8: Budget Preparation
Thursday
visitor: Edwin McFarlane, Vice President and Treasurer
Week
12: December 2 and 3
Accountability, Assessment, and Accreditation
Who
assures that colleges are doing their job? Who should? How is college quality
measured? What is the role of rankings in helping prospective students make their
decisions?
To be read and discussed by all students:
- Ehrenberg, Ronald G. 2000. Tuition Rising: Why College Costs So Much.
Cambridge, Mass.: Harvard University Press.
- Chapter 4: Undergraduate and
Graduate Program Rankings
- Reed
College Accreditation Reports. 2009.
- Dean of Faculty's Overview of
the Faculty and Academic Planning (pp. 17-37, not the appendices)
- Economics
Department report (pp. 158-162)
- Mathematics Department report (pp. 245-249)
- Humanities
110 report (pp. 315-322)
- Accreditation Standards: One
and Two
- Monks, James, and Ronald G. Ehrenberg. 1999. U.S.
News and World Report's
College Rankings: Why They Do Matter. Change 31 (6):42-51.
- Diver,
Colin. 2005. Is There Life after Rankings? Atlantic Monthly 296 (4):136-139.
To
be read and presented by individual students:
Thursday
visitor: Dr. Sandra Elman, Northwest Commission on Colleges and Universities (the
organization that accredits Reed).
Week 13: December 9 and
8
Coping with Financial Crises
What factors cause crises in liberal-arts
college? What policies are implemented? What determines if the college will survive?
Tuesday visitor: Colin Diver, President