In a couple of weeks, I predict, the media will be filled with articles on rankings of colleges. Already, Princeton Review has come out with its effort, with attention focused on their "party schools of America" ranking. As a professor at a school that ranked #2 in those rankings (to the chagrin of the university administration), I must say I think they in a rough way convey good information to students as to schools that do not take learning overly seriously, emphasizing the socialization/consumption dimension of higher education. It is good for kids considering the University of Georgia and the University of Chicago to know that Georgia is a school that emphasizes academics far less than Chicago. Decades ago, Sigmund Romberg wrote a song for the musical "The Student Prince" with three words in its title: "Drink, Drink, Drink." That describes the agenda for many students these days, so ...

I am writing this on a boat on the Rhone River in France (the life of a college professor is tough), just having lunch with a retired McDonald's franchise holder. McDonald's became the most successful food chain in the world by selling standardized products of high quality in huge quantities. They were successful by keeping the number of items they sell at a small number, by offering goods of the same quality at every location, and by having thousands of restaurants and gaining economies of large scale operation.

The same thing is true about other products, such as automobiles and computers. A small number of companies dominate the market making a few standardized products and selling them in huge quantities. It is even true in retail trade—Wal-Mart became extremely profitable exploiting economies of scale.

But what about higher education? Does bigness increase success? Of course,...

(Written with Matthew Denhart)

There is a growing concern about the costs of maintaining high-cost intercollegiate athletics (hereafter, ICA) programs. As universities engage in wage freezes, even furloughs and layoffs, the luxury of massively subsidizing sports is coming under real scrutiny. This is in addition to non-financial concerns arising from various cheating scandals, allegations of favored academic treatment of athletes, criminal activity on the part of athletes, etc.

The most unappreciated financial reality, however, is that the burden of subsidizing ICA falls very unevenly, and tends to be greater at schools that are less well off financially, and have students who are similarly less affluent than those at other schools. The big flagship state universities are mostly in major athletic conferences that earn big bucks from their football, and sometimes their basketball...

In ancient Athens, students generally became educated by going to a learned man, paying him something, and in turn then received his wisdom in the form of lectures and dialogue. Suppose 10 students paid Socrates 10 drachmas each, or a total of 100 drachmas. Socrates' "salary" would then be equivalent to the amount of tuition payments made by students. The proportion of tuition payments going to pay the "professor" would be 100 percent.

Writing in 1776, Adam Smith lamented getting away from the financing scheme of the ancient Greeks, famously noting that the quality of teaching fell at Oxford when students stopped paying the professors directly and gave their tuition payments to the university. Before that happened, the Oxford dons would collect, say, 100 shillings in tuition revenue, and perhaps pay 15 or 20 shillings of that to the University for the use of space and minor other...

The Delta Cost project, amidst some publicity (e.g., a story in Friday's New York Times), has released its latest study, detailing revenue and expense trends in American higher education over the 1998 to 2008 decade. While there are a number of areas where I could (and maybe will) quibble with the authors, on the whole I think their findings are spot on, and should rekindle an interest in soaring college costs.

Among the things that the authors say that I agree with are:

• A majority of incremental enrollment over the decade came OUTSIDE the traditional four year college sector, namely community colleges and for-profit institutions; they, not the traditional universities, are doing the heavy lifting with respect to expanding higher educational attainment;
• however measured, the cost of colleges to consumers is rising faster than their incomes. As project director Jane Wellman says,...

Legend has it that six score and eight years ago, railroad baron William Vanderbilt said, "The public be damned." That thought came back to me as I perused the information displayed on an interesting new (to me at least) Web site, MyPlan.com. Students evaluate some 592 schools on a variety of criteria, including a "bottom line" question 15 that asks student to indicate their overall satisfacation with their school. If, as McDonald's, Coca Cola and Apple Computer so clearly demonstrate, having satisfied customers is key to business success, you might expect the nation's "best" colleges to be the ones where students are, roughly speaking, the happiest.

It is interesting to compare the perceptions of college and university leaders of the "best" colleges, as indicated on the peer-assessment component of the 2009 US News & World Report rankings with student perceptions of what schools they...

Someone once told me that the theory of imperfect competition, usually considered one of the major theoretical advances in economics dating from the 1930s, was actually pretty much laid out two generations earlier in a footnote in Alfred Marshall's Principles of Economics. I was reminded of that reading a superb paper by my former student and Center for College Affordability and Productivity employee, Matthew Denhart. It seems that two giants in economics, Milton Friedman and Simon Kuznets, both winners of the Nobel Prize, wrote a footnote on page 90 of a 1945 monograph for the National Bureau of Economic Research that contains an alternative way to finance college education.

Friedman (better known in educational-reform circles as the founder of the voucher financing idea in K-12 education) and Kuznets (better known as the father of national income accounting) thought it was peculiar...

The Chronicle's Susannah Tully has brought my attention to a great article in the prestigious Journal of Political Economy by Scott Carrell and James West dealing with professorial approaches to teaching, student evaluations and student performance. It seems professors who do more than teach the basic bare-bones knowledge and are in some sense more rigorous tend to get poorer student evaluations (no surprise there). The less rigorous professors even get good performances out of their students in the courses taught but those students subsequently, in follow up courses, do poorer than the more rigorous professors who do more than teach to the standardized test. Sounds reasonable to me.

This got me thinking more about student evaluations and some other evidence. Specifically, I would note that student evaluations began to become popular during the 1960s and early 1970s as a common...

I seldom respond to commenters on my blog posts or articles, but the rather serious attack on my first Chronicle post on the diminishing economic advantage of a college degree rquires a response. Sandy Baum and Mike McPherson (hereafter S and M) not only say I am wrong, but rather sanctimoniously imply that I deliberately ignored appropriate evidence to reach an erroneous conclusion, unlike "people like us who have devoted considerable time and energy to analyzing educational opportunities."

S and M are certainly right that time series data are often subject to different interpretations depending on the years used. So let us analyze earlier the data that S and M comment on. First, the unemployment rate. They are also technically correct that my comparison of the college-graduate unemployment rate with the overall unemployment rate suffers because the college graduates are included...

“Necessity is the mother of invention,” Plato allegedly said. The “necessity” of changing economic circumstances will, in my opinion, force universities and policy makers to reconsider the way we certify that people have achieved any given level of competence and skill. One “necessity” that colleges will soon have to face is that the economic advantages conferred by their bachelor’s degrees are starting to erode.

Take employment security. In 1970, in the era before Pell Grants, large scale federal student loans or the idea that “everyone should have some post-secondary education” was fashionable, the unemployment rate among four year college graduates was only about one-fourth that of the general population. If you were a college graduate, you had relatively few worries about not obtaining or losing a job -- the unemployment rate was a paltry 1.3 percent.

Fast forward four decades to today...