Contacts: Jo Procter, News Director: 413.597.4279, [email protected]
Prof. Gordon Winston: 413.597.2271/2254
WILLIAMS COLLEGE PROJECT ON THE ECONOMICS OF HIGHER EDUCATION AWARDED FOURTH MELLON FOUNDATION GRANT
Williamstown, Mass., Dec. 18, 1998--The Andrew W. Mellon Foundation has announced the awarding of a three-year grant of $475,000 to the Williams Project on the Economics of Higher Education. This is the fourth in a series of Mellon grants totaling nearly $2 million in support of the project.
Economists at the Williams project have looked at the responses of higher education institutions to changes in external funding, the reform of accounting practices in higher education, the size and distribution of the subsidies that colleges provide their students, the influence of college quality on career paths and on the economic status of young people, and the impact of merit aid on quality and distribution of educational opportunity in the U.S.
The project is directed by Gordon C. Winston, the Orrin Sage Professor of Political Economy at Williams College.
Winston launched the project in the summer of 1989, along with Morton Owen Shapiro, currently dean of the University of Southern California College of Letters, Arts and Sciences, and a former faculty member at Williams, and Michael S. McPherson, president of Macalester College and former dean of the faculty and professor of economics at Williams.
Winston said leaders of the project did not originally anticipate that it would continue into a second decade.
"We did not envision it lasting this long, but it seems quite natural to continue as we have managed to stay productive and keep addressing issues that are of real importance to higher education," Winston said.
The grant will support further investigation of the economic implications of "peer effects," or the notion that the quality of a student's education depends on the quality of fellow students and the economic distinctions between business firms and educational institutions
Williams faculty members currently working on the project include Professor of Psychology Al Goethals, Associate Professor of Economics David Zimmerman, and Henry Bruton, professor emeritus in the economics department.
Both Goethals and Zimmerman have already conducted research on peer effects. Last spring, for example, Zimmerman initiated a study that used two years of freshman roommate data from Williams to see if roommates with different characteristics influenced the other's academic performance.
Economists also plan to continue research on the Cost-Price-Subsidy-Hierarchy model developed by the project. Explaining the model, Winston noted that colleges and universities differ from for-profit businesses in two fundamental ways. First, whereas most businesses charge a maximum price that covers the full cost of production, colleges and universities charge a price that covers, on average, one-third of the cost of production. And second, colleges and universities have a greater stake in who they sell to than do businesses, because of the role of peer effects.
"(The model) has profound implications for our tendency to use intuition or ordinary economics for understanding colleges and universities," Winston said.
Scholars and students associated with the project have written 47 discussion papers related to issues in higher education. In the past year, they have contributed articles or chapters to The National Tax Journal, Eastern Economic Journal, The Proceedings of the American Philosophical Society, The Chronicle of Higher Education, The Journal of Economic Perspectives, and other journals. All of the papers can be downloaded from the college website (www.williams.edu).
The project's research has also been disseminated in such media as The New York Times, Wall Street Journal, The Boston Globe, and on National Public Radio. Project economists have also written four books. Most recently, McPherson and Shapiro co-authored The Student Aid Game: Meeting Need and Rewarding Talent in American Higher Education (Princeton University Press, 1998).
Over the past decade, approximately 30 Williams undergraduates have contributed research to the project. Each year, faculty working on the project have employed student research assistants during the college semesters and over the summer, and senior economics students have written five honors theses on topics related to the project.
In addition, the content of three courses has been based on the work of the project, including the current senior seminar in economics. Jared Carbone, a 1997 graduate of Wesleyan University, is the present research coordinator for the project. Gillian Weitz '99 from Ridgewood, N.J.; Dennis DeBassio '99 from Milton, Mass.; and Eddie Murphy, Sr. are the research assistants this semester.
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Williams College is consistently ranked one of the nation's top liberal arts colleges. Founded in 1793, it is the second oldest institution of higher learning in Massachusetts. The college of 2,000 students is located in Williamstown, which has been called the best college town in America. You can visit the college in cyberspace at http://www.williams.edu
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