What do course offerings imply about university preferences?

James Thomas
Working Paper:

University decisions can have lasting effects on students in the labor market; however, little is known about how these decisions are made. This paper develops a new framework for empirically analyzing course offerings at a sample university. The framework is based on the idea that course offerings directly affect student utilities and the probabilities that students choose courses in a given field. As such, administrators deciding which courses to offer are always implicitly trading off the number of students choosing courses in each field and total student utility. By measuring the marginal effects of offering additional courses in each field on field enrollments and student utility, one can quantify these implicit tradeoffs between student utility and field enrollments. In my empirical application, I find that a marginal dollar of spending on social science courses produces 2.5 times as much student utility as a marginal dollar of spending on business or occupational courses at a sample university. From this, I conclude the university is implicitly sacrificing student utility to draw students out of social science courses and into business or occupational courses. If this is intentional, then the university has a preference for business and occupational enrollment which may affect how their course offerings respond to changes in policies or student composition. Counterfactual analyses show that ignoring these responses can lead to understating the effects of changes in student composition on field enrollments by a factor of three.