Do the rich go in search of really high tuition fees?
Here’s an interesting analysis. Professor John Holmwood of the University of Nottingham has suggested that the top-of-the-range fees charged by the universities of Edinburgh and St Andrews will act as a magnet for very rich students, enticing them away from the likes of Oxford and Cambridge as these charge £9,000 less over the full degree cycle. As a result, the two Scottish universities will be swamped by super-duper-rich English students, who will crowd out the Scots (who don’t pay fees) and hugely upset the local population with their plummy accents (well, he didn’t say that last bit, but you get the idea). There is no sign in the report that Professor Holmwood is using any empirical evidence to support his contention.
To avoid any doubt, let me say that I am not suggesting that high tuition fees are desirable, but I am strongly sceptical of the idea that high fees are seen by anyone as a reliable quality statement. Overall in Britain some universities appear to have been attracted to the notion that unless you charge high fees people will assume you’re not much good. In this frame of mind, universities would set fees not in order to cover their costs and provide room for investment, but in order to place a designer label on their degree programmes. So if you follow that logic, a university which is, say, around number 90 in the league tables can at one stroke remove the difference with a university at, say, number 5 by ensuring that it charges the same fees or a little more. The subtext of all of this is presumably that the rich are thick.
There is an urgent need for a proper analysis of the case for and the impact of tuition fees, and of pricing methods in higher education – assuming that (as in England) higher education is not entirely funded by public money. But the idea that price of itself is a guide to quality needs to be nailed, not least because it is an exceptionally stupid idea. It does not become more intelligent if it is used by those arguing against tuition fees, as is apparently being done by Professor Holmwood.
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University Blog 
October 14, 2011 at 11:11 am
Clearly the rich benefit as a class when a positional good (such as an elite education) is very expensive, because then only rich people get to enjoy it. In the case of education this is even more strongly reinforced, because the elite education of the rich helps to justify their continued dominance of society (what is called ‘meritocracy’). This doesn’t require that the rich mistake cost for a quality marker.
That said, though, it is clear that many applicants take the entry tariff for a programme as a quality marker – which makes even less sense than the cost. It is also clear that those English institutions which adopted lower fees last time round (such as Leeds Met) generally lost market share and over time were forced to join the mainstream at the £3k level.
October 14, 2011 at 11:39 am
*But the idea that price of itself is a guide to quality needs to be nailed, not least because it is an exceptionally stupid idea. It does not become more intelligent if it is used by those arguing against tuition fees, as is apparently being done by Professor Holmwood.*
I don’t think I share your reading of Professor Holmwood’s comments. What he actually said (as reported in the Herald Scotland) is something, in my opinion at least, rather obvious, i.e. ‘The problem is that students from better off backgrounds, such as those from private schools who are used to paying fees, will tend not to be put off by having to pay more. By contrast, students from poorer backgrounds are much more likely to view going to university as incurring debt, rather than making an investment in their future. ” Now this does not sound to me as a ringing endorsement of the (I agree simplistic) view that price is an always accurate guide to quality.
Maybe more interesting and worth reflecting upon, is what he had to say about the impact that different educational policicies have on the state and future of the union.
October 14, 2011 at 4:04 pm
Anna, there is a difference between saying that rich people are not put off (so much) by price, and saying that they will *want* to choose the higher price model. The latter is what John Holmwood was saying, because only then does his comment make sense that Edinburgh and St Andrews will see a dramatic rise in demand from wealthy English students. He is clearly suggesting that the price hike will positively *attract* them – not that it won’t put them off. And that’s where I think the argument doesn’t stack up.
October 14, 2011 at 4:47 pm
Hmm… I think we have to agree to disagree on this one, I understand the difference you are drawing, however even if the higher fees ‘positively attract’ rich students, this does not necessarily imply that he shares their views regarding higher fees=better quality…actually I think that he would agree with you that this is not an intelligent proposition at all…
October 14, 2011 at 3:15 pm
Porterhouse Blue eh.
October 15, 2011 at 9:47 pm
The paradoxical idea that a high price is attractive has a long history, known as a snob or Veblen good. Its not so crazy. After all, if you can’t judge quality directly, it may be reasonable to think that the more expensive one is better, other things being equal.
I suspect that this is partly behind the demand for fee-paying schools in Ireland but thats another story.
And there may also be a “network externality”: if you want to be surrounded by other toffs it make sense to go to places that only other toffs can afford.