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Measuring the consumption value of higher education

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  • Annette Alstadsæter

Abstract

The consumption value of education is an important, but rather ignored factor behind the individual's educational choice. This paper suggests a method for measuring the consumption value of education in a compensating differentials framework when the ability bias is corrected for. As an example, the willingness to pay for the consumption value of attending teacher's college during the 1960's is estimated on unique Norwegian panel data. The ex-ante price of the consumption value of teacher's college is estimated to be 38 % of the present value of the individual's potential lifetime income. The ex-post price of this consumption value is for the same individuals estimated to be about 46 % of the present value of the potential lifetime income

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Bibliographic Info

Paper provided by Econometric Society in its series Econometric Society 2004 Australasian Meetings with number 40.

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Date of creation: 11 Aug 2004
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Handle: RePEc:ecm:ausm04:40

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Keywords: Consumption value of education; compensating wage differentials; willingness to pay.;

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  15. Thomas N. Daymonti & Paul J. Andrisani, 1984. "Job Preferences, College Major, and the Gender Gap in Earnings," Journal of Human Resources, University of Wisconsin Press, vol. 19(3), pages 408-428.
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  17. Pedro Carneiro & Karsten T. Hansen & James J. Heckman, 2003. "Estimating Distributions of Treatment Effects with an Application to the Returns to Schooling and Measurement of the Effects of Uncertainty on College," NBER Working Papers 9546, National Bureau of Economic Research, Inc.
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Cited by:
  1. Björn Kauder & Niklas Potrafke, 2013. "Government ideology and tuition fee policy: Evidence from the German states," Ifo Working Paper Series Ifo Working Paper No. 159, Ifo Institute for Economic Research at the University of Munich.
  2. Robert Dur & Amihai Glazer, 2005. "Subsidizing Enjoyable Education," CESifo Working Paper Series 1560, CESifo Group Munich.
  3. André Grimaud & Frederic Tournemaine, 2007. "Why can an environmental policy tax promote growth through the channel of education?," Working Papers 22635, Institut National de la Recherche Agronomique, France.
  4. Anderberg, Dan, 2013. "Post-compulsory education: Participation and politics," European Journal of Political Economy, Elsevier, vol. 29(C), pages 134-150.
  5. Saziye P. Akyol & Kala Krishna, 2014. "Preferences, Selection, and Value Added: A Structural Approach," NBER Working Papers 20013, National Bureau of Economic Research, Inc.
  6. Annette Alstadsæter & Hans Henrik Sievertsen, 2009. "The Consumption Value of Higher Education," CESifo Working Paper Series 2871, CESifo Group Munich.
  7. Philip Oreopoulos & Kjell G. Salvanes, 2009. "How large are returns to schooling? Hint: Money isn't everything," NBER Working Papers 15339, National Bureau of Economic Research, Inc.
  8. Mira Fischer & Patrick Kampkoetter, 2014. "Striving for Excellence: University Competition, Quality Perceptions, and Ability Sorting," Cologne Graduate School Working Paper Series 05-01, Cologne Graduate School in Management, Economics and Social Sciences.

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