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Estimating the social value of higher education: willingness to pay for community and technical colleges

Published online by Cambridge University Press:  27 May 2015

Glenn C. Blomquist ,
Paul A. Coomes ,
Christopher Jepsen ,
Brandon C. Koford  and
Kenneth R. Troske
Paul A. Coomes
Affiliation:
Emeritus in the Department of Economics, College of Business, University of Louisville, Louisville, KY 40292, USA
Christopher Jepsen
Affiliation:
School of Economics and the Geary Institute, University College Dublin, Newman Building, Belfield, Dublin 4, Ireland
Brandon C. Koford
Affiliation:
Department of Economics, Weber State University, Ogden, UT 84408-3807, USA
Kenneth R. Troske
Affiliation:
Department of Economics, Gatton College of Business and Economics Building, University of Kentucky, Lexington, KY 40506-0034, USA
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Abstract:

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Much is known about private financial returns to education in the form of higher earnings. Less is known about how much social value exceeds this private value. Associations between education and socially-desirable outcomes are strong, but disentangling the effect of education from other causal factors is challenging. The purpose of this paper is to estimate the social value of one form of higher education. We elicit willingness to pay for the Kentucky Community and Technical College System (KCTCS) directly and compare our estimate of total social value to our estimates of private value in the form of increased earnings. Our earnings estimates are based on two distinct data sets, one administrative and one from the U.S. Census. The difference between the total social value and the increase in earnings is our measure of the education externality and the private, non-market value combined. Our work differs from previous research by focusing on education at the community college level and by eliciting values directly through a stated-preferences survey in a way that yields a total value including any external benefits. Our preferred estimates indicate the social value of expanding the system exceeds private financial value by at least 25% with a best point estimate of nearly 90% and exceeds total private value by at least 15% with a best point estimate of nearly 60%.

Keywords

community collegecontingent valuationearningseducation externalitiessocial returnsI2 EducationH4 Publicly-Provided GoodsH23 Externalities
Type
Articles
Information
Journal of Benefit-Cost Analysis , Volume 5 , Issue 1 , January 2014 , pp. 3 - 41
Copyright
Copyright © Society for Benefit-Cost Analysis 2014

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