Higher Education Price Indices: Report

This looks interesting. CCAP or the Center for College Affordability and Productivity, have released a report addressing the ways in which college costs are calculated and reported.

From the CCAP site:

This report examines two commonly used higher education price indices, the Higher Education Price Index (HEPI) and the Higher Education Cost Adjustment (HECA), finding that these indices are almost always misused and suffer from significant biases. Both the HEPI and HECA are often used to discount tuition levels; however, both indices are inappropriate for such a use. The whole point of using a price index in this instance is to put otherwise incomparable values into the same context, something that an industry-specific price index does not allow. These indices also suffer more than most price indices from several sources of bias, including productivity bias, quality bias, substitution bias, and (in the case of the HEPI) from a self-referential bias.”

While this may seem like something only of interests to economists and chief financial officers of colleges, the current budget crisis in higher education makes this sort of discussion timely.

Higher Education Price Indices

Posted in: Business Models

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