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

Abstract

for their research assistance. We would also like to recognize the valuable comments and suggestions provided by various seminar and conference participants. We also thank Bridget Terry Long for sharing her data. The views expressed herein are those of the authors and do not necessarily reflect the views of the National Bureau of Economic Research. NBER working papers are circulated for discussion and comment purposes. They have not been peerreviewed or been subject to the review by the NBER Board of Directors that accompanies official NBER publications.

University Choice: The Role of Expected Earnings, Nonpecuniary Outcomes, and Financial Constraints

“…Furthermore, our structural model also enables us to provide evidence on the importance of credit constraints by simulating various policies that would relax those constraints. Other studies in developing countries suggest similarly that credit constraints are substantial in places like Mexico, Chile and South Africa (Gurgand et al 2012;Kaufmann, 2012;Solis, 2017) Finally, our paper also builds upon a line of research on the role of non-pecuniary outcomes or psychic costs on educational choice (e.g., Abbott et al 2016;Cunha et al, 2005;D'Haultfoeuille and Maurel, 2013;Jacob and Lefgren, 2007;Navarro and Zhou, 2016;Stinebrickner and Stinebrickner, 2014b;Jacob, McCall, and Stange, 2018;Wiswall and Zafar, 2018). The literature finds low educational choice elasticities with respect to earnings (e.g., Beffy et al, 2012, Wiswall and, suggesting that non-pecuniary factors are important.…”

The financialization of US higher education

“…Research universities compete for federal and private research funding, and therefore invest in facilities such as research centres, joint research ventures and hospitals (Powell and Owen-Smith, 1998;Geiger, 2004Geiger, , 2006. Residential colleges invest in revenue-generating services and amenities like dormitories, dining halls and college sports in order to develop new income streams as well as to attract students willing to pay higher tuition and fees (Slaughter and Leslie, 1997;Armstrong and Hamilton, 2013;Jacob et al 2013). Although some states and municipalities issue public bonds on behalf of schools, especially community colleges, the majority of higher education organizations are responsible for acquiring most of their own capital to fund infrastructure, facilities and other investments.…”

“…The high level of reported interest spending on auxiliary services indicates that less wealthy public and private colleges are using institutional debt towards maximizing commercial revenues, while at the wealthiest institutions it was oriented toward maximizing financial revenues. Scholars have argued that colleges expanded amenities to boost commercial revenue by attracting more students willing to pay higher tuition and fees (Jacob et al, 2013). In 2003, Clare Cotton, president of the Association of Independent Colleges and Universities in Massachusetts at the time, told the New York Times, 'it's exactly the psychology of an arms race.…”

Do Factors Associated With the Increases in Higher Education Costs Affect Average Net Price at Four‐Year Public Institutions?

“…Some authors would say that it is not the inefficiencies of higher education but the increase in administrative spending that have caused part of the increase in higher education costs (Curtis & Thornton, ; Desrochers & Kirshstein, ; Jacob, McCall, & Stange, ; Vedder, ). For the same reasons that instructional inefficiencies affect net price, so do increases in administrative expenses, with the result being more out‐of‐pocket dollars for students and their families.…”