Book Review: “Campus Economics: How Economic Thinking Can Help Improve College and University Decisions”
This article is part of NASFAA's occasional book review series, where members share their reflections on books, published within the past five years, on higher education themes of interest to financial aid professionals. The opinions offered and statements made do not imply endorsement by NASFAA or the authors' employers and do not guarantee the accuracy of information presented. Would you like to suggest a book for a future review? Email us at [email protected] with your recommendation.
If you’ve ever hankered for a Wizard of Oz-style peek behind the curtain of higher education finances, “Campus Economics: How Economic Thinking Can Help Improve College and University Decisions,” by Sandy Baum and Michael McPherson, is your opportunity to do just that, and you don’t even have to drop a house on anyone to start your journey.
In about 130 easily digestible, well-written pages, two of the most knowledgeable minds in higher education economics provide both basic economics tools and a broad-strokes overview of the higher education environment. While seasoned financial aid professionals are likely to find nothing surprising behind the proverbial emerald curtain, as Baum and McPherson’s master class in the economic realities of higher education reveals little new information for financial aid administrators with decision-making authority, the book offers key foundations for those who may be new to the profession.
Reviewed by A. Joshua Leonard, Ph.D. data analyst and higher education researcher who specializes in the field of financial aid
Written to “facilitate communication … by creating a common vocabulary” in order to assist campus leaders “involved in making sound decisions,” “Campus Economics” does a great job of achieving this part of its central goal. The book starts with solid chapters laying the groundwork of common vocabulary, applicable economic principles, core concepts in running an institute of higher education, and a realistic examination of the admittedly ugly questions about whether a college is a business and how it should be operated.
Later chapters dive into more applied and timely financial issues—like employee compensation, budgeting, endowment management, and financial aid policies—all with an eye on the recent lessons drawn from the COVID crisis. The authors take a multi-pronged approach here, using abbreviated case studies, empirical research on industry trends, and a series of short dives into hot topics like the potential game theory of tuition discounting.
The whole book follows a logical flow, is divided into focused and easily digestible sections, and generally makes economic and higher education concepts understandable rather than playing into the jargon-laden, high handed language trope so common in research papers and industry publications on the topic.
“Campus Economics” feels like a book created primarily to be tucked into a new trustee’s welcome package by campus leadership hoping to instill an essential measure of higher education industry knowledge. The book’s lessons are unlikely to be new and/or immediately pertinent for financial aid staff; after all, how many financial aid directors are participating in paradigm-shifting conversations about tuition discounting without knowing what the term means? How many financial aid counselors are having policy-setting conversations about whether to temporarily cut employee salaries to meet budget shortfalls?
Most of the relevant educational lessons of this book are either firmly in the rear-view mirror for current decision-makers or aspirational knowledge for other staff on their road to senior leadership. While learning about differences in full-time faculty hiring trends between public and private institutions can be eye-opening for anyone working in higher education, it’s unlikely to be vital information for most people's daily operations.
In short, while the lessons of “Campus Economics” are useful, they’re either lessons already learned by current campus leaders or inapplicable teachings for future executives not yet seated at the policy-making table.
While “Campus Economics” makes good on its promise of delivering common language and concepts to enhance intra-campus, inter-area understanding and decision-making, the book could have done more to explore the ways in which institutions use economics thinking to improve their decision-making frameworks. The three-page conclusion essentially recommends readers take the knowledge they’ve gleaned and talk to others. To use the authors’ own Theodore Roosevelt quote, the book tells readers to “do what you can with what you have, where you are” while leaving the reader (and their expanded economic vocabulary) exactly where they started.
At the end of the day, Baum and McPherson’s “Campus Economics” equips the reader with an invaluable understanding of the higher education industry, provides foundational economic tools and concepts for examining operations, and creates a shared vocabulary through which decision-makers can better serve their institutions. However, the book offers little guidance on how to use the lessons learned.
I’d absolutely encourage those aspiring to a seat at their institution’s policymaking table and those seeking an economist’s view of higher education to pick up the book for 130 pages of insight and framework, but, for all its valuable insight into higher education concepts, “Campus Economics” is unlikely to become a staple primer for most of us working in financial aid.
“Campus Economics: How Economic Thinking Can Help Improve College and University Decisions,” by Sandy Baum and Michael McPherson, Princeton University Press, February 14, 2023.
*****
Dr. A. Joshua Leonard is a data analyst and higher education researcher who specializes in the field of financial aid. When not refining raw data into student-serving stories and reports, Josh spends his time researching the effects of work-study, working as a Blue Icon Advisor, and advising campus partners on how to improve financial aid operations. He’s also an avid reader, board game designer, and blacksmith.
Publication Date: 10/29/2024
Heidi K | 10/29/2024 9:28:52 AM
Great review, Dr. Leonard! Just ordered this book from Princeton Press, can't wait to read it. I've been a fan of Sandy Baum's work since my graduate days. I plan to share it with my finance/budget group who could benefit from some of the economic principals.
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