Archived posting to the Leica Users Group, 2002/08/25
[Author Prev] [Author Next] [Thread Prev] [Thread Next] [Author Index] [Topic Index] [Home] [Search]/BEGIN ECON LECTURE Counting housing, car and food as college costs is a common fallacy but it does not make it correct. Even if the person did not go to college, s/he would still need to have a dwelling, a set of wheels and to eat. Hence, room and board should not be counted because these are not incremental expenses of going to college. The proper way to calculate college costs is to add the tuition and the foregone earnings during the four years. Assuming a minimum wage of $5/hour (realistic for someone without a college education) and a 50-week working year, this amounts to $10'000 per year plus the tuition. By going to college, the student increases his/her expected future earnings. If the net present value of that earnings increase is greater than the net present value of the tuition and the foregone earnings, then it is worth it to go to college, otherwise not. Room and board plays little or no role in this calculation. /END ECON LECTURE Of course there are other benefits of college which are not easily measured in monetary terms, such as parties, football games, general enlightenment etc. These are factored into the calculation one way or the other, even if that calculation takes place on a subconscious level. Nathan S Dimitrov wrote: > I think that's an average for a private college. Tuition being 8k, > housing 8k(most live on campus), food 3k, extra fees 1.5k. Actually, > that's more along 20k school costs for the semester. Factor in the usual > living expenses, and that can go through the roof. > But then we have a day-care in Santa Monica that runs over 60k a year. > You know, movie industry people. > Slobodan Dimitrov - -- Nathan Wajsman Herrliberg (ZH), Switzerland e-mail: wajsman@webshuttle.ch mobile: +41 78 732 1430 Photo-A-Week: http://www.wajsman.com/indexpaw2002.htm General photo site: http://www.wajsman.com/index.htm - -- To unsubscribe, see http://mejac.palo-alto.ca.us/leica-users/unsub.html