Modelling university behaviour and choices

Earlier this week I was reading a very interesting theoretical economics paper on the incentives and constraints that influence universities' choices between teaching and research. The paper is by John Beath, Joanna Poyago-Theotoky and David Ulph and it is entitled: 'University Funding Systems: Impact on Research and Teaching'. The paper is available as a Discussion Paper at the Economics e-Journal, and you can download it using this link.

You might imagine that theory has no place in thinking about our universities, or that if it does it should not be economics, but perhaps sociology, political science, anthropology, etc. But it seems to me that this is a big mistake, not because I believe economic theory has all the answers, but because I find that building an economic model, even quite a simple one as in this paper, often helps to illuminate important questions, and sometimes in quite unexpected ways. It is always easy to criticise a model by claiming that this or that assumption is unrealistic, and in a strict formal sense such criticism is nearly always right. But in my view, it is also nearly always irrelevant, because it misunderstands how models work, why we build them, and what we think we can learn from them.

The present paper illustrates these points quite nicely. The model makes a variety of assumptions, some of which clearly relate to core aspects of what universities do and how they function, while other assumptions are more technical and are made to ensure analytical tractability. After all, there isn't great value in a highly complicated model that is considered to be 'correct' in some sense if no one can solve it or derive any interesting conclusions from it. The first type of assumption includes the idea that universities engage in teaching and research, and they have preferences over these two 'outputs' or 'products'. Where the preferences come from remains unexamined, but different universities in the system can place different weights on research as against teaching. The ideas that universities need to produce teaching of at least some minimum quality level, and that quality is costly in terms of academic staff time, are other assumptions built into the model. Achieving research quality is also costly, institutions face a budget constraint implying that there are real tradeoffs between teaching and research, and individual academics have a time budget - if they spend more time on research, less is available for teaching, and conversely.

Most of this seems to me highly reasonable, at least as a useful starting point for analysing universities. Of course, one might want to extend it by modelling aspects of system-wide competition, or by having multiple disciplines (let's say, at least two, to start with the simplest case) in each institution competing for resources. But even the present paper, with reasonable values for the main parameters, reaches some intriguing conclusions. Most notably, it finds that universities are likely to divide into two groups, one of which opts for a very research intensive strategy (the research elite), the other consists of institutions placing greater weight on teaching - they may still do some research but it is not such a central part of their portfolios. Since this is not a terrible approximation to UK reality, I thought it was interesting to see it drop out of a model with such a nice, intuitively appealing and simple structure.

Are students customers?

It's very tempting to dive into the growing debate on UK student funding. In the last few days we've had a speech by Vince Cable advocating a graduate tax, lots of critical commentary about that idea, more calls for higher and more flexible fees, and then a remark by the Scottish education secretary, Michael Russell, firmly rejecting the reintroduction of fees in Scottish universities and asserting that a 'uniquely Scottish solution' will be found to our university funding problems - whatever that might mean. For now, though, I'll resist the temptation to comment on these important funding issues, not least because there will be plenty of opportunity later in the year when Lord Browne's review publishes its report.

Instead, I'll set down a few thoughts on another quite tricky issue, the idea of the student as a 'customer'.

In my long distant student days this would have seemed a wholly ridiculous idea, for back then a university education was still only available for a relatively small subset of the relevant age group - well under 10% - and for most of us it was regarded as a massive privilege, an opportunity to build new lives for ourselves. We certainly never gave a thought to any sort of 'customer rights', and mostly we arrived at university knowing that it was down to us to make the best of it, to get everything out of it that we could. We quickly discovered that there were good and bad lecturers, good and bad tutors, and few firm constraints on what we did, how hard we worked. In some ways the lack of formal structure was both frightening, because it was so different from the excessively structured routine of secondary school, and liberating, because it enabled us to organise our work very flexibly around a huge range of other activities that we could choose to pursue. A great time.

Nowadays, of course, much has changed, not least the scale of the university system, with over 40% of young people going on to further study, mostly aiming for university degrees. At the same time, especially in England, fees have become an accepted (albeit not necessarily liked very much) part of the system. And taken together, these two changes are giving rise to an increasing emphasis on the student as a customer. So what does this mean, exactly, and how far should it be welcomed?

The bigger scale of the university system means that our students are drawn from a wider range of abilities than used to be the case, and many of the academically weaker ones (and actually, not only these) need more support from their respective universities in order to navigate a path through to successful completion of their degrees. They need both academic guidance and pastoral support of various kinds, and it seems to me entirely right that most institutions have adapted over the years to provide such support.

The charging of fees, however, seems to me to make students think more like customers in a shop, seeing themselves as purchasers of a 'product'. This then gives rise to pressures for change that are, I think, not so desirable as compared to the more general student support discussed in the previous paragraph.

For in my view, offering a degree programme is not really the same thing as selling any other product, such as a packet of biscuits. Most importantly, in higher education there is a huge information asymmetry between buyer (student) and seller (university) which is not present in the case of the packet of biscuits just mentioned - with most everyday products, buyer and seller know pretty well what the product is, and what its quality ought to be, competition normally wiping out producers of inferior products. The student, in contrast, cannot know what a degree programme is going to be like, and what it might do for them, until he/she has experienced it; and there is at present only quite constrained competition between different universities in the UK.

Now, to some extent the information asymmetry can be overcome by the publication of league tables and various comparative reports on universities that can be used to help future students make their choices of where to go, what to study. These are analogous to the consumer reports that often help us choose household goods, and they can be quite helpful. However, there are also dangers in this approach, since league tables can effectively pressurise institutions to do things that are not necessarily all that great in terms of the educational process we are engaged in. Let me give a few examples.

(1) One indicator often published is the share of 'good' degrees awarded, i.e. the share of first class and upper second class degrees. There's just a possibility, I say no more than that, that the very use of such an indicator might encourage institutions to ease upwards over time the share of such degrees they award.

(2) Some comparative reports mention typical student 'contact hours' each week, i.e. lectures, tutorials and other types of contact, and some universities have come in for criticism when their contact hours in certain courses have been deemed (by the media, often) to be 'too low'. At times, commentary on this issue seems to imply that students are not learning anything unless they are actually being taught, which is surely nonsense. After all, students are supposed to do a great deal of independent study for most degrees, a crucial detail too often forgotten by the media (and others).

(3) Similarly, universities are increasingly pressed to provide rapid feedback on student assignments, and to provide copious amounts of course material either on line or in the form of printed handouts. This is fine, and I certainly support the provision of good, timely feedback. But I have been surprised in recent years when quite large numbers of students have not troubled to collect their marked essays from me - so although I would have provided comments, they never benefited the intended recipients! Course material, too, is no bad thing, though I do think many more students could usefully learn how to take good lecture notes and take more control of their own learning. Two points follow: First, we are there as academic staff to provide needed support to our students, most definitely not to 'spoon feed' them; and second, the educational process is a two-way street, with responsibilities on both sides. So I would argue that students are not customers in the commonly understood sense of that term; rather, they are participants - indeed partners - in a shared educational experience. That's something very different.

Teaching - Supporting students

When a university is famous, it is usually so as a result of its internationally renowned research. However, for most universities, including my own, the main business necessarily has to do with the teaching we do, both at the undergraduate and postgraduate levels, since it is through this core activity that we receive the bulk of our funding. Hence it is vital that we take teaching seriously and do it well. This is important for existing students, so they get good degrees and leave us with strongly positive feelings about the institution where they have studied; such outcomes also put our graduates in a good position to follow interesting careers. Moreover, gaining a reputation for good, caring teaching can also help us recruit future students, esesential for the continuing vitality of the university.

So what does it mean to be a good teaching institution, and to take care of our students?

Nowadays it seems to mean a great deal. First and foremost, we need good degree programmes, well taught and presented in a lively, interesting way. This, we have in abundance, I think, though of course what we teach is constantly under review and being updated. Then, as an institution, we need to show that we offer a good physical teaching environment, well resourced and with high quality facilities, and at least as good as our main competing institutions. This, too, my own university does pretty well these days. And as an added extra, we even have a lovely campus which is beautifully maintained, and some very good quality residences for those students who live on the campus. So far so good.

The last aspect of good teaching is probably the hardest, and has to do with our diverse personal contacts with students, whether these involve personal discussions about essays or larger projects; providing prompt and helpful feedback on students' academic work; giving advice about academic, personal and financial matters; responding to questions in lectures; responding to student e-mails (the main means of communication now); being available at predictable times for meetings with students; and probably others that don't come to mind as I write this. This field is hard to manage because the types of contact are so varied, and because it can involve such a big time commitment both from academics and support staff. But in terms of the sort of impression that our students get of our commitment to teaching, I suspect it is at least as important as the formal teaching that we do, possibly more so (especially for the more advanced students who tend to need more contact).

Luckily, I think my university does an amazingly good job in fostering good practice when it comes to our contacts with students. In some areas there are formal policies in place - either at university or School level, but in other areas we simply rely on the professionalism of staff at all levels to provide the responses and support that students need. My impression is that this part of our university system works really well - it stands up well both in national and international comparison, in my experience.

Taking all this together, we have a fairly complicated but effective system for delivering the 'teaching function' in my university, and I hope that we can hold onto it once public spending cuts start to feed through to the university sector in a serious way. Fingers crossed.