When my parents went to college in the fall of 1986, college was the key to a job. Nearly anyone who got a college degree was guaranteed an opportunity for employment. Both my mother and father graduated from the University of Pittsburgh with jobs lined up immediately after graduation. For my parents, college was clearly worth every penny. However, as I enrolled in Penn State University, society questioned whether college was really worth it. I have discussed a number of different economic theories and how economics can be found throughout college life, but I have yet to explain the larger benefits of college.

People in the 21^st Century usually attend college for one reason: employment. Choosing to go directly into employment comes with a number of benefits and drawbacks. Those who skip college enter the workforce debt-free as opposed to their peers who embarked on a four-year college experience. Also, they have a four-year head start on savings. In the short run, attending college is much less beneficial to an individual. However, college is not a short-term investment; education is beneficial in the long run.

Those who attend college will inevitably come out of school with more debt and fewer savings. Additionally, they will come out of school being severely underemployed (most likely). But these are just short-term setbacks. Many college graduates will enter into higher-ranking positions than their non-collegiate counterparts. College graduates also have higher potential for future earnings. So, while high school graduates earn more money in the short than their friends who went to college, college graduates surpass their earnings in the long run. College grads are also more likely to get jobs with better hours, benefits, and working conditions than those who did not attend college.

On the macro side of economics, education plays a key role as well. During the 2007 recession, those who did not attend high school accounted for the majority of people who lost their jobs. Those who got a bachelor’s degree lost jobs, but their unemployment rate was far lower than high school graduates. Graduate students actually gained employment during the recession. This is a prime example of how education leads to overall job security. This job security is important to the community as a whole because when the unemployment rate decreases, it decreases the dependence on government funding and leads to lower crime and incarceration rates.

Besides monetary gains, college allows you to grow up and become a civic person. Since attending Penn State, I have worked on the student government, helped advocate for issues I am passionate about, and I have joined the Phi Kappa Theta fraternity where I now hold the position of Community Service Chair. These are immeasurable experiences that add so much human capital to a person’s résumé. These experiences do not have a monetary value placed on them and vary depending on the type of person. Often times those who do not attend college feel that they do not value the experiences of college at its current price. Others simply value money over experiences.

So is college really worth it? Well, as my first year as a Penn State student winds to an end, I can safely say college is most definitely worth it.

If you are anything like me, you have experienced the frustration of dining on campus. Some things just do not make sense to the average person. Why is The Mix so disorganized and always out of items? Why does South have so many alternatives while most other areas are limited to just the buffet and small options? Why are dining hours not uniform? Simple economic principles can explain the small complexities that make campus dining the way it is.

I enjoy eating at South or picking a sandwich up from The Mix if I am on the run. Despite the quality of the food, both of these places frustrate me with the speed of their operations. Both South and The Mix leave me waiting a long time for food. Each time I enter I think of more efficient ways to get food to customers. However, these places do not need more efficient means of production because of the economic principles behind campus dining. The campus meal plan is an example of a sunk cost because students will never see that money again, even if they choose not to eat on campus. This gives students an extra incentive to eat on campus even if they would rather dine somewhere else. As for the slow prep times, the lack of competition allows this to occur. Since students will still buy food from campus regardless of speed, it permits workers at The Mix or anywhere else on campus to operate below average speed without fear of repercussions or profit loss. If the campus dining market were more competitive, I believe campus dining would be much more efficient.

Some would argue that HUB dining offers competition to the market on campus. While the HUB offers many alternatives to dining halls, they still do not make campus dining a perfectly competitive market. Since students do not receive discounts on Sbarro or Chick-Fil-A like they would at the commons. Because of this, students have less of an incentive to eat at the HUB and more of an incentive to eat at the commons. Additionally, the HUB dining options are under contract with Penn State University, which means a portion of their profits goes to Penn State, thus still earning profits for one company.

Besides the actual distribution and money behind campus dining, problems occur with campus dining times. Each place where you can get food on campus has its own unique hours. When I worked with UPUA, we discussed making dining hours uniform. While this is a feasible idea that would be very beneficial to the student body, Penn State dining will still operate without issue given the current hours. This is due to the same principles that allowed long wait times. There is an extreme lack of competition for food, so dining commons will not be inclined to change their hours. If there were some kind of competition for on-campus dining, there would be a higher demand for extended hours. It is simply easier and more cost effective to operate at reduced hours because there are no marginal benefits of remaining open longer.

College basketball culminates in one final tournament that both sports fanatics and gambling addicts love equally: March Madness. The 64-team NCAA basketball tournament that takes place at the end of March each year is one of collegiate sports’ most dramatic and exciting events. In celebration of March Madness, let’s look at the economics of collegiate basketball.

First let’s look at the economic behaviors of the players themselves. One key difference between college and pro basketball is the distance of the three-point line. The pro three-point line is further out than the college line. Most pro players do not shoot much further past the three-point line when playing, but college sees more players taking longer threes during games. This may seem like a poor idea to some people since they are shooting from further away and decreasing the chances of making the shot. However, there are some economic benefits of this tactic. Players who can shoot three-point baskets and want to go to the NBA have an extra incentive when playing the game. Not only are they incentivized to score and help their team win the game, but they are also incentivized to impress pro scouts. By shooting threes from well beyond the college three-point line, it shows scouts that they are ready for the pros.

In addition to the players’ incentives, schools have incentives to have their teams do well. Administrators of universities have a stake in their basketball teams doing well. When teams go far in the NCAA tournament, it increases sales of merchandise and tickets. Both of these generate incredible revenue to the university and the program. It also earns more time for television exposure. This also gains recognition for schools’ basketball programs, which will lead to increased attendance and media coverage in the long run.

The world of sports is full of connections to economics; competition and incentives are what drive the game.

Readers:

Recently, my posts on both of blogs were unable to be accessed. I just rewrote the ones I could not access. Sorry for the inconvenience and happy reading!

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In my first semester as a student at Penn State, my father visited and took me out to lunch. During lunch, he asked me what kind of drinks they served at parties. My father isn’t dumb; he knows that alcohol is quite prevalent in college life. So, I told him the truth and said that the most common beverage served is Natural Light. He cringed and asked why we would subject ourselves to such an awful beer. This made me think back to the simple economic principle of normal and inferior goods.

Normal and inferior goods are one of the basic principles of economics. A normal good is a good that people will buy more of as income increases. For example, I love eating at The Deli downtown, but it is far too expensive for me to eat there on a regular basis due to the fact that I have zero income currently. However, if I had a job, I would demand more delicious sandwiches from The Deli. An inferior good, on the contrary, is a good that people will buy less of as income increases. Inferior goods decrease in demand when income increases because people can afford something of higher quality rather than more mediocre items. By this definition, Natural Light is a perfect representation of an inferior good.

The low cost of Natty explains why so many college students choose to purchase it over other light beers, but the principle of inferior goods explains why no one in their right mind with a steady income would pick up a thirty-pack. However, the bargain hunter would argue that buying more beer for less money is the best move. Despite the principle of inferior goods, this might hold some truth depending on an individual’s desires.

Take a fraternity party, for example; the goal of drinking at a frat house is not usually to sip drinks casually to enjoy them. Most attendees of a frat party are there to get drunk. Since fraternities want to throw the best parties they can, they aim to please the patrons. Therefore, it is in the brothers’ best interest to purchase beer with the lowest price tag. This way, the partygoers will be satisfied because they have beer to drink and the brothers will be happy because they can get a lot of beer for a very low price while still throwing a great party.

With Natty being so cheap, many people question why anyone would buy more expensive beer. This takes us back to the variable of individual desires. My father is a prime example of this variable in play. Most of my peers drink to get drunk, therefore they do not have a desire to drink a better beer. But my father does not drink solely to get drunk, so he will shell out the extra ten dollars for a case of Yuengling Lager.

So if you are even asked by your parents why you would stoop to the bourgeois level of Natural Light, just tell them that you are a rational individual and are acting in your own best interest.

There are a number of things that most Penn State students have to go through before they graduate; most will attend football games, most will have a class in Forum or Willard, most will take a picture with the Nittany Lion shrine, and most Penn State students will attend a class where the professor requires the infamous clicker.

Clicker classes are generally dreaded by the average student. Because of clickers, it forces kids to go to every single lecture class. Now, the average individual would say, “You paid so much money for that class, why wouldn’t you go?” This is a great argument, but the economist would refute this with the principle of sunk costs. A sunk cost is an investment in which the cost cannot be recovered. College courses are a perfect example of a sunk cost because whether a student attends every day of class or shows up for exams only, they will still never see the roughly $1,600 again.

The principle of a sunk cost impacts college attendance because it does not incentivize people for attending classes. Obviously there are inherent benefits of attending class that are not measured by money – increased likeliness of doing well on exams and increased human capital just to name a couple – but it is much harder to get up for an 8 AM lecture class in 100 Thomas without clear, immediate incentives. To combat this, professors will often take attendance for points. But how can professors do this efficiently in classes with three hundred kids? This is where the clicker comes into play.

This semester, my Math 110 course requires a clicker for attendance points. The class, however, does not utilize the clickers every day. Instead, there are roughly forty clicker days throughout the semester for students to earn easy points for simply showing up. The catch is that the professor does not announce which days the clickers will be used. This provides an incentive for students to show up each day even if clickers will not be used. Problems still exist with this method, however.

Some students will argue that clickers do not solve the problem of incentivizing attendance. The common argument is that the students will show up, do the clicker question, and then leave the class. This argument is valid to a certain extent; clickers will not entirely reduce the number of lecture absences. Even if students could leave after the clicker points were secured, most will not since they have already invested their time getting up for class and walking to the classroom. Since the students have invested time, their opportunity cost of leaving is not as valuable. For example, if I simply skipped my first class, I would have time to sleep or continue binge-watching episodes of Friends on Netflix. But if I got up, looked presentable, and walked all the way to Sparks, it would cost me less to simply stay in the class. In addition to that, the non-monetary incentives also drive me to stay in the class rather than leaving.

Clickers in all of their dismal glory are a prime example of the dismal science in everyday life. This is only one example of how economic principles play a role in our practical lives whether we realize it or not.