College As Country Club: Do Colleges Cater to Students’ Preferences for Consumption? 

Apparently, this is a catchy title for a white paper. The report, released January 2013 by the National Bureau of Economic Research, set off a firestorm of responses in the higher education media sphere: Stephen Dubner of Freakonomics, The Chronicle of Higher Education, and Huff Post Teen, have all composed responses to the claims of the study. Well, what’s the shocking news?

We find that most students do appear to value college consumption amenities, including spending on student activities, sports, and dormitories. While this taste for amenities is broad-based, the taste for academic quality is confined to high-achieving students.1

The NBER paper goes on to explain the 16%-20% variation in the allotment of financial resources at those colleges serving “high-achieving students”, and those colleges serving everybody else. In anecdotal terms, the paper supports the idea that many students reason as Mark Sampson’s daughter reportedly did in a December 2012 Wall Street Journal article: “Mark Sampson says his daughter took “about two looks at the campus” of University of Florida in Gainesville and declared it too old. She picked University of Central Florida and hopes to move into University House this fall.” This article, by Dawn Wotapka, appeared in the WSJ Real Estate section, as an analysis of the booming luxury development market that surrounds university centers. The phrase “investing in higher education” evidently holds many meanings.

The frightening aspect of the argument put forward by the NBER report is this – demand-side market pressures may be widening the quality of education gap between the academically elite and the average student. Or, as they say on page five of the report:

This is an important finding given that quality assurance is primarily provided by demand-side pressure: the fear of losing students is believed to compel colleges to provide high levels of academic quality. Our findings call this accountability mechanism into question.1

Where does the media weigh in? Stephen Dubner offers the study’s findings as another possible explanation of America’s skyrocketing tuition costs and student debt.2 Scott Carlson at The Chronicle of Higher Education sees the spending on amenities as a sort of arms race that will inevitably result in economic collapse.3 The Huff Post posits, “the results of new research suggest this might be exactly what college-bound high school seniors want.”

Is this really the case? Do most college-bound high school seniors want luxury living? After reading another recent report, The American Freshman: National Norms Fall 20126, which details the expectations average incoming freshman have of their new schools, I find it hard to reconcile all this info. The National Norms report states incoming freshman see the number one reason for attending college is to find a better job upon graduation. (If you want to know more about the National Norms report, reading the previous blog post.) Shouldn’t it follow that students “shop” for colleges with this concern at the forefront of their mind?

I don’t see any easy answers here. Should colleges do a better job of marketing themselves as providers of workforce readiness?  Do high school seniors chose colleges with their id, and then evaluate the choice with their ego? (Freud; never without an answer.) Could we put an end to all the building and wild expectations if we tightened the reins on student borrowing? If colleges stopped building would they necessarily spend more on academic resources?

Whatever the answers may be, they reside with the student-consumer – at least that’s how the National Bureau of Economic Research understands it.