Economics
421 --- Economics of Reed College
Fall
2007
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. Those marked with
a dagger (†) 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: August 29
and 30
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?
Week
2: September 5 and 6
The Economics of Higher Education
Sources and
uses of funds within liberal-arts colleges and other institutions of higher education.
Trends in institutional finances.
Due Wednesday, September 5:
Assignment #1: Choosing Reed vs. alternatives
Wednesday
- Kirp, David L., Shakespeare, Einstein, and
the Bottom Line: The Marketing of Higher Education, (Cambridge, Mass.: Harvard
University Press, 2003), Chapter 2: "Nietzsche's Niche".
- Fain,
Paul, "Antioch's
Closure Signals the End of an Era," Chronicle of Higher Education
53 (42), June 22, 2007.
- Clotfelter, Charles T., "The
Familiar but Curious Economics of Higher Education: Introduction to a Symposium,"
Journal of Economic Perspectives 13(1), Winter 1999, 3-12.
- Winston,
Gordon C., "Subsidies,
Hierarchies, and Peers: The Awkward Economics of Higher Education," Journal
of Economic Perspectives 13(1), Winter 1999, 13-36.
- Rothschild, Michael,
and Lawrence J. White, "The
Analytics of the Pricing of Higher Education and Other Services in Which the Customers
are Inputs," Journal of Political Economy 103(3), June 1995, 573-586.
- Winston,
Gordon C., "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,
January 2003.
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.)
- Hoel, Jessica, Jeffrey Parker,
and Jon Rivenburg, "A Test for Classmate
Peer Effects in Higher Education," unpublished working paper, 2005.
Week
3: September 12 and 13
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?
Due Wednesday, September
12: Assignment #2: An alumnus is worried about productivity
- Massy,
William F., "Productivity Issues in Higher Education," Chapter 3 in
W.F. Massy, ed., Resource Allocation in Higher Education, (Ann Arbor, Mich.:
University of Michigan Press, 1996).
- Breneman, David W., Liberal Arts
Colleges: Thriving, Surviving, or Endangered? (Washington D.C.: Brookings
Institution Press, 1994).
- Vedder, Richard, Going Broke By Degree:
Why College Costs So Much, (Washington D.C.: American Enterprise Institute
Press, 2004), Chapters 1-3.
Week 4: September 19 and 20
Human
Capital and the Demand for Higher Education
The benefits of higher education
and of elite higher education. Is it worth it?
- Becker, William
E., "Why Go to College? The Value of an Investment in Higher Education,"
in W.E. Becker and D.R. Lewis, eds., The Economics of American Higher Education,
(Boston: Kluwer Academic Publishers, 1992), Chapter 4.
- Goldin, Claudia,
and Lawrence F. Katz, "The Race
between Education and Technology: The Evolution of U.S. Education Wage Differentials,
1890 to 2005," Cambridge, Mass.: National Bureau of Economic Research,
NBER Working Papers, No. 12984, May 2007. (This is a chapter from the authors'
forthcoming book.)
- †Berger, Mark C., "Private Returns to Specific
College Majors," in W.E. Becker and D.R. Lewis, eds., The Economics of
American Higher Education, (Boston: Kluwer Academic Publishers, 1992), Chapter
6.
- †Cohn, Elchanan, and Terry G. Geske,
"Private Nonmonetary Returns to Investment in Higher Education," in
W.E. Becker and D.R. Lewis, eds., The Economics of American Higher Education,
(Boston: Kluwer Academic Publishers, 1992), Chapter 7.
- †Manski,
Charles F., "Adolescent Econometricians: How Do Youth Infer the Returns to
Schooling?" 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, 1993), Chapter 2.
- †Eide, Eric,
Dominic Brewer, and Ronald Ehrenberg, "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, October 1998, 371-376.
- †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," Journal of Human Resources 34, Winter
1999, 104-123.
- †Thomas, Scott L., and Liang Zhang, "Post-Baccalaureate
Wage Growth within Four Years of Graduation: The Effects of College Quality and
College Major," Research in Higher Education 46(4), June 2005,
437-459.
- †Zhang, Liang, "Do
Measures of College Quality Matter? The Effect of College Quality on Graduates'
Earnings," Review of Higher Education 28(4), Summer 2005, 571-596.
- Dale, Stacy Berg, and Alan B. Krueger, "Estimating
the Payoff to Attending a More Selective College: An Application of Selection
on Observables and Unobservables," Quarterly Journal of Economics
117(4), November 2002, 1491-1527.
Thursday visitor: Ron Albertson,
Director of Career Services
Week 5: September 26 and 27
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?
- Becker, William E., "The Demand for Higher Education,"
in S.A. Hoenack and E.L. Collins, The Economics of American Universities, (Albany,
N.Y,: State University of New York Press, 1990), Chapter 7.
- 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.
- Moore, Robert L.,
A. H. Studenmund, and Thomas Slobko, "The Effect of the Financial Aid Package
on the Choice of a Selective College," Economics of Education Review
10(4), 1991, 311-321.
- Avery, Christopher, and Caroline M. Hoxby, "Do
and Should Financial Aid Packages Affect Students' College Choices?" 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 6. (Working paper version
available online.)
- Linsenmeier, David M., Harvey S. Rosen, and Cecilia
Elena Rouse, "Financial
Aid Packages and College Enrollment Decisions: An Econometric Case Study,"
Review of Economics and Statistics 88(1), Febraury 2006, 126-145.
- Monks,
James, "The
Impact of Merit Based Financial Aid and Price Illusion on College Enrollment:
A
Field Experiment," Cornell Higher Education Research Institute, Working
Paper No. 101, January 2007.
Thursday visitor: None. Discussion
of Assignment #3.
Week 6: October 3 and 4
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?
- Bowen,
William G., and Derek Bok, The Shape of the River: Long-Term Consequences of
Considering Race in College and University Admissions, (Princeton, N.J.: Princeton
University Press, 1998), Chapters 1-5 and 8-10.
- Hill,
Catherine B., and Gordon C. Winston, "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, 2006).
Thursday
visitor: Paul Marthers, Dean of Admission
Week 7: October
10 and 11
Institutional Admission and Financial-Aid Policies
How
institutions design enrollment and financial-aid policies to attract the desired
group of students within their budgets.
- Wilkinson, Rupert, Aiding
Students, Buying Students: Financial Aid in America, (Nashville, Tenn.: Vanderbilt
University Press, 2005), Chapters 1, 2, 7, and 8.
- Hill, Catherine B.,
Gordon C. Winston, and Stephanie A. Boyd, "Affordability:
Family Incomes and Net Prices at Highly Selective Private Colleges and Universities,"
Journal of Human Resources 40(4), 769-790, 2005.
- McPherson, Michael
S., and Morton Owen Schapiro, The Student Aid Game: Meeting Need and Rewarding
Merit in American Higher Education, (Princeton, N.J.: Princeton University
Press, 1998), Chapters 9-13.
Thursday visitor: Leslie Limper,
Director of Financial Aid
Week 8: October 24 and 25
College
Endowment Management
What is the endowment and how is it managed? How
does it contribute to Reed's revenue stream?
- Ehrenberg, Ronald
G., Tuition Rising: Why College Costs So Much (Cambridge, Mass.: Harvard
University Press, 2000), Chapter 3.
- Massy, William F., "Endowment,"
Chapter 4 in W.F. Massy, ed., Resource Allocation in Higher Education,
(Ann Arbor, Mich.: University of Michigan Press, 1996).
- Merton, Robert
C., "Optimal Investment Strategies for University Endowment Funds,"
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, 1993), Chapter 7, read pp. 211-218 only.
- Something
on use of endowment for political purposes?
Thursday
visitor: Andrew Lonergan, Reed Investment Analyst
Week 9: October
31 and November 1
College Fund-Raising
Who contributes to colleges
like Reed?
- Ehrenberg, Ronald G., and Christopher L. Smith, "The
Sources and Uses of Annual Giving at Selective Private Research Universities and
Liberal Arts Colleges," Economics of Education Review 22(3), June
2003, 223-235.
- Clotfelter, Charles T., "Alumni
Giving to Elite Private Colleges and Universities," Economics of Education
Review 22(2), April 2003, 109-120.
- Cunningham, Brendan M., and Carlena
K. Cochi-Ficano, "The
Determinants of Donative Revenue Flows from Alumni of Higher Education: An Empirical
Inquiry," Journal of Human Resources 37(3), Summer 2002, 540-569.
- Dugan, Kelly, Charles H. Mullin, and John J. Siegfried, "Undergraduate
Financial Aid and Subsequent Giving Behavior," Williams Project on the
Economics of Higher Education, Disc. Paper DP-57, Nov. 2000. (Available online
from http://www.williams.edu/wpehe/.)
- Monks, James, "Patterns
of Giving to One's Alma Mater among Young Graduates from Selective Institutions,"
Economics of Education Review 22(2), April 2003, 121-130.
Thursday
visitor: Hugh Porter, Vice President for College Relations
Week
10: November 7 and 8
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?
- Ehrenberg,
Ronald G., Tuition Rising: Why College Costs So Much (Cambridge, Mass.:
Harvard University Press, 2000), Chapter 8.
- Ehrenberg, Ronald G., Marquise
McGraw, and Jesenka Mrdjenovic, "Why
Do Field Differentials in Average Faculty Salaries Vary across Universities,"
Economics of Education Review 25 (3), June 2006, 241-248.
- Epstein,
David, "Watch
Out for the New Guy," Inside Higher Education, July 27, 2005,
http://insidehighered.com/news/2005/07/27/marshall.
- Monks, James, and
Michael Robinson, "The
Returns to Seniority in Academic Labor Markets," Journal of Labor
Research 22(2), Spring 2001, 415-427.
- Chait, Richard P., "Why
Tenure? Why Now?" in R.P. Chait, ed., The Questions of Tenure, Cambridge,
Mass.: Harvard University Press, 2002.
- McPherson, Michael S., and Gordon
Winston, "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, 1993.
- Ashenfelter, Orley, and David Card, "Did
the Elimination of Mandatory Retirement Affect Faculty Retirement Flows?"
American Economic Review 92(4), September 2002, 957-980.
Thursday
visitor: Peter Steinberger, Dean of the Faculty
Week 11: November
14 and 15
Making and Implementing College Budgets
How does the college
make decisions and implement them through its budget policy?
- Ehrenberg, Ronald G., Tuition Rising: Why College Costs So Much (Cambridge,
Mass.: Harvard University Press, 2000), Chapter 14.
- Tuckman, Howard P.,
and Cyril F. Chang, "Participant Goals, Institutional Goals, and University
Resource Allocation Decisions," 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, 1990), Chapter 3.
- James,
Estelle, "Decision Processes and Priorities in Higher Education," 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, 1990), Chapter 4.
- Meisinger,
Richard J., College and University Budgeting: An Introduction for Faculty and
Academic Administrators, 2nd ed., (Washington, D.C.: National Association
of College and University Budget Officers, 1995), Chapter 1, Chapter 3 pp. 49-77,
Chapter 4 (omit pp. 135-143), Chapter 5, and Appendix.
- Curry,
John R., "Budgeting," in Managerial Analysis and Decision Support:
A Guidebook and Case Studies, (Washington, D.C.: National Association of College
and University Budget Officers, 2004), pp. 29-83.
- Anthony, Robert
N., and Regina E. Herzlinger, Management Controls in Nonprofit Organizations
(Homewood, Ill.: Richard Irwin, 1980), Chapter 8: Budget Preparation.
Thursday
visitor: Edwin McFarlane, Vice President and Treasurer
Week
12: November 28 and 29
Accountability, Assessment, and Accreditation
Who
assures that colleges are doing their job? Who should? How is college quality
measured?
- Ehrenberg, Ronald G., Tuition Rising: Why College
Costs So Much, (Cambridge, Mass.: Harvard University Press, 2000), Chapter
4.
- Monks, James, and Ronald G. Ehrenberg, "U.S.
News and World Report's
College Rankings: Why They Do Matter" Change 31, November/December
1999, 42-51.
- Pike, Gary R., "Measuring
Quality: A Comparison of U.S. News Rankings and NSSE Benchmarks,"
Research in Higher Education 45(2), March 2004, 193-208.
- Avery,
Christopher, Mark Glickman, Caroline Hoxby, and Andrew Metrick, "A
Revealed Preference Ranking of U.S. Colleges and Universities," Cambridge,
Mass,: National Bureau of Economic Research, Working Paper 10803, 2004.
- Diver,
Colin, "Is There Life after Rankings?" Atlantic Monthly, November
2005, 16-19.
Thursday visitor: Colin Diver, President
Week
13: December 5
Colleges in Crisis
What factors cause crises in liberal-arts
college? What policies are implemented? What determines if the college will survive?
- "Back
from the Brink: How Six Colleges, Once in Decline, Reversed their Fortunes,"
Chronicle of Higher Education 49(47), August 1, 2003, A22-28:
- Hay, George, et al., "Report
of Committee on Long Range Planning," Reed College, March 29, 1971.
- Allen,
Charlotte, "Death by Political Correctness: Who Killed
Antioch College?" Weekly Standard, November 12, 2007, 24-35. (Available
through LexisNexis on Reed Library site.)
- Keyes,
Ralph, "Present
at the Demise: Antioch College, 1852-2008." Chronicle of Higher Education,
July 20, 2007.