Last year, I posted about this this research on the willingness-to-pay for studying in person. That research was based on a survey of 46 Columbia University public health students. The researchers asked students how much they would be willing to pay in a straightforward way that is open to substantial bias, whereas a better approach would present students with hypothetical scenarios and derive their willingness-to-pay from their choices between scenarios (using either a contingent valuation approach or a discrete choice experiment). I concluded that post with:
Hopefully, someone else is doing research along those lines.
It turns out there was, and the results are reported in this NBER Working Paper by Esteban Aucejo, Jacob French (both Arizona State University), and Basit Zafar (University of Michigan). Specifically, they surveyed over 1500 students at Arizona State University, asking (among other things) how likely they would be to re-enrol in the Fall 2020 semester, under different conditions and at different costs. Importantly, the conditions included: (1) whether the pandemic continued, or was controlled; (2) whether classes would be in person, or remote; and (3) whether campus life and activities were restricted, or could continue as before. Each survey respondent was presented with six scenarios (with combinations of the conditions) at seven different levels of cost. That allowed Aucejo et al. to extract estimates of the willingness-to-pay (WTP) for in-person classes, and for access to the usual campus life and activities. For the sample as a whole, they found that:
...students are willing to pay $1,043 (approximately 8.1% of average annual cost) to have access to [campus social life]... students are willing to pay $547 more per year in order to have in-person classes (relative to remote classes); this represents 4.2% of average annual cost of attending university, and approximately half the WTP for social activities.
So, there is a small, but statistically significant willingness to pay for campus social activities, and for in-person classes. Students are willing to pay more for social activities than for in-person classes. Some might argue that's because Arizona State University has a reputation as a party school, although it is now recognised for its investment in research. More likely, the higher WTP for social activities reflects the availability of substitutes. Online classes are a viable substitute for in-person classes, but online social activities are not much of a substitute for on-campus social activities.
Things get even more interesting when Aucejo et al. look at heterogeneity across the student sample. This is illustrated in Figure 5 from the paper, which plots the cumulative density functions for WTP for social activities and in-person classes:
Concentrating on the WTP for in-person classes, about one-third of students are willing to pay a negative amount for in-person classes. Those students prefer to study online. There is then about 20 percent of students who have WTP of roughly zero, and about half of students have positive WTP for in-person classes. Those students prefer not to study online. The top half of the distribution (positive WTP) is similar for both in-person classes and social activities. There are far fewer students with negative WTP for social activities than there is for in-person classes.
Aucejo et al. then look at WTP across groups, and find that:
...first-generation students' average WTP for in-person classes is only $204 per year, while second-generation students (that is, students with at least one college-educated parent) have an average WTP of $550... First-generation students also appear less willing to pay for campus social activities (on average, $547 per year versus $1,126 for second-generation)... Similar patterns emerge across a number of socioeconomic divides; for example, nonwhite and non-Honors students appear less willing to pay for in-person instruction and social activities, respectively.
Looking closely at their analysis of WTP for social activities, lower-income and first generation students have lower WTP for social activities, but those effects disappear once Aucejo et al. control for hours worked. Students who work more than 20 hours per week (who also happen to be disproportionately lower-income and first generation students) have lower WTP for social activities. It is likely that reflects a time constraint. In relation to WTP for in-person classes, lower-income students have lower WTP, and that effect is persistent even after controlling for other characteristics (including working). None of the other socio-economic characteristics they test are associated with WTP for in-person classes.
There are a number of things we can take away from this paper, in terms of what it implies about the post-pandemic university teaching environment. First, and most importantly, students are heterogeneous in their preferences (this should not come as a surprise). Some students prefer in-person classes, while other students prefer online classes. A one-size-fits-all approach to university education as we come out of the pandemic is clearly not going to be optimal for all students. However, trying to cater to both groups simultaneously (by providing classes that are at once both in-person and online) is not optimal either. This flexible approach (that many universities are currently adopting) increases lecturer workload. Consequently, it likely reduces the quality of teaching they can offer, both to online and in-person students, compared with teaching in a single mode (either in-person or online). That suggests to me that specialisation is going to out-perform the flexible model. Universities that specialise in in-person teaching will do a better job of it than the flexible university, and will be more attractive to students who prefer in-person learning. Universities that specialise in online teaching will do a better job of it than the flexible university, and will be more attractive to students who prefer online learning. The flexible university is stuck in the middle, not catering adequately to either group of students, despite frantically trying to provide for both.
Second, the value of the social interactions that students have on-campus is large and important. This value is mostly lost in the online model. If universities are committed to a flexible approach (despite the problems I just noted), or are providing an online-only model of education, then finding some way of replicating the social activities for remote students is a must. Universities that can do this well will provide significant value to their students. However, time constraints are binding on social activities for lower-income and first generation students. Finding ways to ensure that these students are able to engage in the important social activities that generate lasting social networks or peers and future colleagues, partners, and collaborators is going to be important, both for in-person and online students.
Overall, I note that more students demonstrated a preference for the in-person teaching model. That fits nicely with my priors. It would be interesting to know whether that result holds across more institutions than just Arizona State University.
[HT: Marginal Revolution, back in March]
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