Fri 10 Apr 2009
This is my fifth post on interesting aspects of “A Report from Williams 2008.” Today, I want to focus on the economics of the two graduate programs that Williams maintains: the Center for Development Economics and the Graduate Program in the History of Art. The College spends $2.9 million on these programs. Given the tough economic times, should we continue to do so?
1) The College seems to provide no financial aid or other assistance for CDE students. Fees to Williams seem to be around $47,000 and there are 24 CDE students this year. Total revenue to the College would be about $1.1 million.
2) The Masters in Art History is a two year program with total fees of around $41,000 with financial aid available, including merit aid. There were 11 graduates last year, so assume 22 students at any one time. Ignoring financial aid, total revenue would equal $0.9 million.
3) Given that the primary (in my view, only) mission of Williams is to be the best undergraduate college in the world, we should shut down both programs. They cost $2.9 million but only generate $2 million (at most) in revenue. In a world of plenty, Williams can afford the extravaganza. But, in a world of limits, these programs — both valuable in-and-of themselves and, indirectly, to a small but non-zero percentage of the undergraduate population — are not worth the money. If the choice is between these programs and lay-offs or decreases in financial aid, then both programs should go.
Consider some counterarguments:
1) You don’t understand the economics. The programs are actually profitable for Williams. Could be! Without better data, it is hard to know for sure. But, back-of-the-envelope, they seem like money losers, at least when considered together. Moreover, it is quite possible that the $2.9 million budget number underestimates the cost. Does that include depreciation for the CDE building? What about a pro rata share of the money that the College spends on libraries, security and so on?
2) Even if you cancel the programs, you won’t save money because the primary cost is faculty and you can’t fire them. Perhaps. And certainly that is true for tenured faculty. But Williams does not need to renew the contracts for lecturers. We can get by with fewer visitors.
3) These programs are a big part about what makes Williams Williams. No, they are not. They are add-ons, appendages slapped on by ambitious faculty members. More than 95% of undergraduates aren’t even aware of them and would not notice if they were gone.
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