Containing Cost without Sacrificing Achievement: Some Evidence from College-Level Economics Classes.

Escalating costs in higher education have prompted most colleges to experiment with cost containment strategies. It appears, however, that few strategies are based on a serious analysis of their impact on student achievement. This paper suggests a feasible way to do this. It makes use of a large database on the teaching of college economics (TUCE III) to identify and rank by cost per unit of student achievement a number of key controllable inputs into the educational process at the classroom level. Several of the results on cost effectiveness are rather surprising and offer the potential for large cost savings. Costs for higher education have risen consistently at rates far in excess of general inflation. This has caused concern among college administrators because higher tuition costs have the tendency to depress enrollment. Public colleges have also come under attack from state legislatures. The National Conference of State Legislatures1 estimates that state appropriation growth will be slightly below the inflation rate in the future because state legislators face budget deficits and public demand to reprioritize the allocation of revenues, especially in the areas of health care, K-12 education and corrections.2 As universities face enrollment and/