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Australian Education Policy note #auspol [thread]https://fabitmart.github.io/files/edu_note1.pdf
The Commonwealth government is considering a reform that includes dramatic increases in the price ("student contribution") of getting Humanities degrees for domestic students.
https://www.bbc.com/worklife/article/20200728-why-australia-is-charging-more-to-study-history
This has happened twice in the recent past, when the "National Priority" subsidies to some disciplines were cut (+24% in 2009, edu & nursing; +85% in 2012, maths and hard sciences).
This has happened twice in the recent past, when the "National Priority" subsidies to some disciplines were cut (+24% in 2009, edu & nursing; +85% in 2012, maths and hard sciences).
This proposed policy started a heated debate and one of the main concern of its critics has been that it would drive students away from Humanities. However, this might not be a valid concern.
Indeed, if the HECS system works, students should not care much about the cost of their education, as they are able to comfortably pay it back to the government over time.
In this short policy note, I look at the number of commencing bachelor students by year and discipline and test whether there are changes in their trend after a drastic increase in the cost of studying a discipline.
In Econ jargon, I test whether the demand for a discipline is elastic to changes in price.
I find that the trend in commencing students does not change significantly after the cost of studying a discipline dramatically increases.
I find that the trend in commencing students does not change significantly after the cost of studying a discipline dramatically increases.
Punchline: the proposed cut in subsidies for humanities degrees cannot by justified on economic grounds. It can only be justified on moral grounds.
Addendum: I have made my code (R and Stata) available on my website. The dataset is available too! Check them at https://fabitmart.github.io/portfolio/3-au-edu-wp/
Thank you @andrewjnorton for answering my questions and sharing your data on fees. I hope my dataset can be of use to you in the future! PS I saw your blogpost and see that we agree. I hope this note can add something to the debate!
CC @garethjbryant @fmarked @RabeeTourky
CC @garethjbryant @fmarked @RabeeTourky
Updated Table, showing confidence intervals
Even using 90% CI, the hypothesis of no effect cannot be rejected
While the link has remained the same ( https://fabitmart.github.io/files/edu_note1.pdf ), the paper has been updated
Might be of interest to @profholden too
