Common Music Tour Dates: Common Sense and the Marginal Student .

Common Sense and the Marginal Student, Bryan Caplan

Common sense says that marginal consumer of a product - the person who say "Eh, why not?" before he buys - benefits less from his purchase than the product's average consumer. This is clearly lawful for consumption decisions: The typical person at the opera clearly enjoys the award more than the reluctant newbie whose friends talk him into going.

This principle - the marginal person gains less than the average - is equally plausible for investment decisions. The typical college student will take a larger return from his education than the kid who grudgingly enrolls to get his parents off his back. When I share this style with practicing labor economists, however, they're quick to lecture me. Don't I recognize that instrumental variables methods argue that the marginal student gains at least as much - if not more - than the average student? My main technical objection is that labor economists inappropriately focus on completed education rather than attempted education. But that aside, I only consider common sense more reliable than instrumental variables. Fancy econometrics reduces my confidence in my original position, but only slightly.Now just yesterday, I learned that Heckman and co-authors draw a new NBER working paper vindicating the usual sense view that marginal students acquire a lower return. Their evidence against all the fancy econometrics is. even fancier econometrics:This paper estimates the marginal returns to college for individuals induced to participate in college by different marginal policy changes. The recent instrumental variables literature seeks to judge this parameter, but in general it does so completely under strong assumptions that are tested and found wanting. Our empirical analysis shows that returns are higher for individuals with values of unobservables that cause them more likely to see college.It would be tempting, but dishonest, to bring that the latest research "proves me right." I was convinced that school helped the marginal student less years earlier I heard about Heckman's results. I doubt that reading his research in depth will make me any more confident. Yes, I'm glad to see Heckman lending his Nobel status to the vulgar sense position. But in a perfect world, the common sense position wouldn't accept his office to survive.P.S. Dan Klein and I are speaking in Madison, Wisconsin tonight (Monday 10/25). If you take the talk, please say hi.