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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

Suggested Citation

  • Annette Alstadsæter, 2004. "Measuring the consumption value of higher education," Econometric Society 2004 Australasian Meetings 40, Econometric Society.
  • Handle: RePEc:ecm:ausm04:40
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    Cited by:

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    2. Björn Kauder & Niklas Potrafke, 2013. "Government Ideology and Tuition Fee Policy: Evidence from the German States," CESifo Economic Studies, CESifo, vol. 59(4), pages 628-649, December.
    3. Tomasz Gajderowicz & Gabriela Grotkowska & Jerzy Mycielski & Leszek Wincenciak, 2014. "Social and economic determinants of higher education choices in Poland," Ekonomia journal, Faculty of Economic Sciences, University of Warsaw, vol. 38.
    4. Mira Fischer & Patrick Kampkötter, 2017. "Effects of German Universities' Excellence Initiative on Ability Sorting of Students and Perceptions of Educational Quality," Journal of Institutional and Theoretical Economics (JITE), Mohr Siebeck, Tübingen, vol. 173(4), pages 662-687, December.
    5. Akyol, Pelin & Krishna, Kala, 2017. "Preferences, selection, and value added: A structural approach," European Economic Review, Elsevier, vol. 91(C), pages 89-117.
    6. Annette Alstadsæter & Hans Henrik Sievertsen, 2009. "The Consumption Value of Higher Education," CESifo Working Paper Series 2871, CESifo.
    7. John V. Winters & Weineng Xu, 2014. "Geographic Differences in the Earnings of Economics Majors," The Journal of Economic Education, Taylor & Francis Journals, vol. 45(3), pages 262-276, September.
    8. Fricke, Hans, 2014. "Tuition Fees and Student Achievement - Evidence from a Differential Raise in Fees," VfS Annual Conference 2014 (Hamburg): Evidence-based Economic Policy 100521, Verein für Socialpolitik / German Economic Association.
    9. Grimaud, Andre & Tournemaine, Frederic, 2007. "Why can an environmental policy tax promote growth through the channel of education?," Ecological Economics, Elsevier, vol. 62(1), pages 27-36, April.
    10. 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.
    11. Juntip Boonprakaikawe & Frédéric Tournemaine, 2006. "Production And Consumption Of Education In A R&D‐Based Growth Model," Scottish Journal of Political Economy, Scottish Economic Society, vol. 53(5), pages 565-585, November.
    12. Kraft, Holger & Munk, Claus & Seifried, Frank Thomas & Steffensen, Mogens, 2014. "Consumption and wage humps in a life-cycle model with education," SAFE Working Paper Series 53, Leibniz Institute for Financial Research SAFE.
    13. Long, Mark C. & Goldhaber, Dan & Huntington-Klein, Nick, 2015. "Do completed college majors respond to changes in wages?," Economics of Education Review, Elsevier, vol. 49(C), pages 1-14.
    14. Dur, Robert & Glazer, Amihai, 2008. "Subsidizing Enjoyable Education," Labour Economics, Elsevier, vol. 15(5), pages 1023-1039, October.
    15. Anderberg, Dan, 2013. "Post-compulsory education: Participation and politics," European Journal of Political Economy, Elsevier, vol. 29(C), pages 134-150.

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    More about this item

    Keywords

    Consumption value of education; compensating wage differentials; willingness to pay.;
    All these keywords.

    JEL classification:

    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity
    • J33 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Compensation Packages; Payment Methods
    • I21 - Health, Education, and Welfare - - Education - - - Analysis of Education

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