what kind of a good is education?

In Making Up Our Mind: What School Choice is Really About (University of Chicago Press, 2019), Sigal R. Ben-Porath and Michael C. Johanek write that education is a private good, a public good, and a positional good. These concepts are worth unpacking because they are central to debates in education policy, and policy more generally.

Elinor Ostrom argued that pure public goods meet two criteria: they are non-excludable and non-subtractable. The former means that it is practically impossible (regardless of your goals) to keep people from benefitting from the good. The latter means that using some of the good does not use it up; the same amount is left for others.

A classic example of a public good is national defense: if the US maintains a military deterrent against foreign invasion, then everyone in the US benefits, and my security does not detract from yours. Another example is any basic discovery about nature. As Jefferson wrote: “He who receives an idea from me, receives instruction himself without lessening mine; as he who lights his taper at mine, receives light without darkening me.”

For Ostrom, a pure private good meets the opposite criteria: it is excludable and subtractable. For instance, a bowl of rice can (practically speaking) be reserved for one person, and if that person eats a bite of it, less rice is left. Even if I leave it in the lunchroom for anyone to take, it is still a private good because I could have excluded it and subtracted from it.

This twofold distinction permits goods that are neither public nor private. Some goods are excludable but non-subtractable. An example would be Netflix: the company can keep you out unless you pay, but one person’s use (hardly) subtracts from anyone else’s. These are called “club goods.”

And some goods are subtractable but non-excludable. For instance, the fish in the ocean are definitely subtractable: over-fishing can wipe them out. But it is practically very difficult and expensive to block individuals from fishing. An even more important case is the earth’s capacity for absorbing carbon. It is subtractable but non-excludable. These are called “common pool resources.”

Using Ostrom’s four-way distinction, what kind of a good is education? This is a complicated question, because education involves a range of inputs, outputs, and contextual factors. Many are neither purely subtractable nor non-subtractable. For instance, adding another student to Tufts’ enrollment doesn’t really subtract from anyone’s experience or the value of Tufts diploma, but adding 10,000 students would. Spaces at Tufts are somewhat subtractable and completely excludable. We offer something between a club good and a private good.

As a rough guide, here are some preliminary categorizations of some (not all) educational goods.

Ostrom’s framework is meant to be exhaustive, and I believe it is. But you can also tag specific goods with additional labels:

A positional good: This is a good whose value is relative to the value of other people’s goods of the same kind. For instance, if one candidate for a job holds a BA, and all the other candidates hold Associates Degrees, the college grad has an advantage that is a positional good. In a competition with MAs, the same person would have a positional disadvantage. Positional goods must be excludable but may not be completely subtractable. (My holding a BA does not reduce the supply of BAs). These are often club goods.

A luxury or “Veblen” goods: These are goods for which the demand increases as the price rises. People sometimes want things because they are expensive–consumer brands are examples. Admission to US private universities may be a Veblen good, although that’s a critical claim. It’s certainly the case that colleges are more desirable the more selective they are, and if you consider the “price” of admission to be tuition plus the applicant’s accomplishments, then college is a classic Veblen good. Most students want to attend colleges that are harder to get into.

What to make of these distinctions depends on your ideological positioning. I start with the stereotypical liberal stance, but I am uncertain about it and interested in shifting. That position says that education is importantly but not exclusively a public good because of the words in the bottom-right square (above). Insofar as it’s also a private good, we don’t want to leave markets to generate it all by themselves, because some families won’t be able to afford it and disparities will create problematic positional goods. Yet education is, in part, a private good, and we wouldn’t be able to generate it without some involvement by markets.

About Peter

Associate Dean for Research and the Lincoln Filene Professor of Citizenship and Public Affairs at Tufts University's Tisch College of Civic Life. Concerned about civic education, civic engagement, and democratic reform in the United States and elsewhere.
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