Over the next two weeks my eldest son will be rejected by some colleges, accepted by others. And then we’ll likely have to make a hard choice, between cheap state schools and expensive prestigious ones (or online colleges). A colleague told me the best econ paper on this found it doesn’t matter. From its 1999 abstract:
A 2006 NYT article confirms this:
as does a 2004 Atlantic Monthly article:
Krueger also said something similar in the NYT in 2000:
All pretty consistent right? At this point you might think you needn’t dig deeper. But in 2000 Krueger went on to say:
In fact his original 1998 working-paper abstract said:
Half Sigma screams from the rooftops:
23 percent is quite a bit of money, it’s almost like getting two college degrees instead of one! They also discovered that there was a benefit to attending a more expensive school. The more expensive tuition resulted in a lifetime internal rate of return of 20% for men and 25% for women.
THE MOST MIS-CITED STUDY EVER?
Whenever this study has been cited, it has always been for the exact opposite of its actual conclusion. … This demonstrates a persistent bias in which the media only reports what people want to hear instead of reporting the truth.
That 2006 Atlantic Monthly article did go on to say:
Ack! I was almost conned by elite journal editors and media reporters into believing a comforting lie! What saved me was becoming puzzled by actually reading the original paper, and then bloggers I found via web searches to resolve my confusion. Thank you Half Sigma, who has more valuable results to convey:
STUDENTS WITH HIGHER SAT SCORES EARN LESS MONEY
The regression analysis in the Dale & Krueger study had a coefficient for the person’s SAT score and a second for the square of the SAT score. Based on these two coefficients, earnings peaks at an SAT score of 1100. People who have an SAT score higher than 1100 earn less money.
I would find it hard to believe if I hadn’t discovered the same thing myself. …
ATHLETES EARN MORE MONEY
The Dale & Krueger regression analysis also included a variable indicating if the person was an athlete. Those who were athletes earned more money. This also confirms my own findings from the General Social Survey.