Higher Ed the Next Bubble?

This is an interesting piece. I personally never heard of Peter Thiel, but that should not indicate that what he says is not relevant. If this is true I wonder how it would all play out. The money quote:

Instead, for Thiel, the bubble that has taken the place of housing is the higher education bubble. “A true bubble is when something is overvalued and intensely believed,” he says. “Education may be the only thing people still believe in in the United States. To question education is really dangerous. It is the absolute taboo. It’s like telling the world there’s no Santa Claus.”

Like the housing bubble, the education bubble is about security and insurance against the future. Both whisper a seductive promise into the ears of worried Americans: Do this and you will be safe. The excesses of both were always excused by a core national belief that no matter what happens in the world, these were the best investments you could make. Housing prices would always go up, and you will always make more money if you are college educated.

HT: The big lead

Higher Education and Competition

The economics of higher education is an interesting one (and an excellent final position paper for those looking for a good topic). There is the difference between teaching universities vs. research universities (Temple is the latter). There is the competition between private universities vs. public universities (Temple the latter). And as highlighted in this article the difference between wealthy universities with large endowment vs. relatively poor ones with small endowments (again, Temple is the latter).

This has been very relevant lately. The reason is that the government has been pushing the wealthy universities to spend some of that endowment money to help the students. The result (to quote the article):

"Getting into Harvard is like winning the lottery twice," said Barmak Nassirian, an executive with the American Association of Collegiate Registrars and Admission Officers. "You're getting into Harvard, and if you don't have the adequate resources, you're getting into an institution that has the financial resources to package you properly."

So the natural question that comes up for economists are "should these universities have to spend their endowmnets?" and if so, "how does a place like Temple University (without those endowments) compete with the larger wealthy institutions?"

A Cynical Look at Higher Education

For those interested in getting their PhD you may enjoy this. No comments needed. Enjoy.

The Future of the Textbook

When a technological shock is ushered into an industry economists examine what the ramifications are. This is an excellent example, and if your stuck on a final position paper this may give you some ideas. In addition if you are writing about the music industry or journalism there may be some correlations here. The old way of doing things has changed. How do we move on? (this is not an economists, but it is a great read for this type of class)

Bundling Athletics Into Higher Education

If you did not like that story about how cable companies bundle their product (so you have to pay for a bunch of channels that you wont use) you probably will not like this one. Basically we are doing the same thing in our athletic fees at universities.

The Economics of Higher Education

What should society’s role in Higher Education be? If left to the free market is the equilibrium quantity of degrees floating around in society the socially optimal amount? If society should try to increase higher education (by subsidizing it) how should that be done exactly? Pay the schools, pay the students tuition, give tax breaks, etc… (One good topic to consider for your position paper)

On a similar note how should endowments to universities work? They are often of a staggering amount. This is the case for Penn State, only the money to be used seems to be constrained so it is only used for an ice hockey team (and arena). But how can this be? Basically in the same day’s news I read about how Penn State is getting $88 million at the same time they will increase tuition next year by 5% (in an economy with no inflation). (This is another good position paper, what is the role of sports in higher education)

On another side note, I admit I have not had the time to look into the issue much but this is bound to cause problems with Penn State’s athletic department in other areas. Title IX basically says the percentage of male athletic opportunities is equal to the percentage of female opportunities. This constraint is especially significant in big football teams since there is no female equivalent. I wonder how Penn State will end up complying with Title IX. (The ‘fairness’ of Title IX is another good position paper)

How does the stimulus package alter Temple’s finances?

A first glance of how the stimulus package will affect higher education.

Economics job market

Economists see markets in everything. But how would they examine the market for themselves? This link could also give you insight into how they higher education professions work (for those who are interested).

Are Colleges Now Baring the Burden of the Economic Downfall?

Colleges around the county are experiencing the effects of the economic crisis. Download here to see the steep decline of endowments and their strategies to survive.