The 'Hamilton Effect' in Higher Education

Does scarcity distort or enlarge?

February 21, 2018

My family wants to go to a Broadway show.

The problem, as you can guess, is that we want to see Hamilton.

We have a scarcity problem.  A Hamilton problem.  Tickets are hard to get, and super expensive when you can get them.

The demand for Hamilton far outstrips the supply.

The unhappy result is that rather than going to some other Broadway musical, we end up going to none.  We’ve anchored our expectations on Hamilton.  Everything else seems like too big a compromise.

Rather than Hamilton creating opportunities for other (perfectly wonderful) musics, the show is crowding out all other players. (At least for the Kim family).

This result is irrational, perverse, and sub-optimal.

Logically, we should choose to pay for tickets for a Broadway show based on the quality of that show, and the happiness that attending will provide.  We should not compare the positives of a Broadway musical that we could attend with those that we cannot.

As we know, however, our behaviors are predictably irrational.  No amount of cajoling on my part with my family about the logical fallacy of holding out for an impossible Hamilton over a possible alternative seems to have an impact.

We wait for Hamilton.

All of this Hamilton drama has caused me to think about the corollaries in our world of higher education.

It is an interesting thought experiment to compare college to Broadway.  In all the important ways, we are very different.

Higher education is a highly regulated and government supported (although less so) industry that exists for the public benefit, and which is empowered to issue credentials.  Broadway is, well, Broadway.  Totally different.  But in some ways higher ed and Broadway might be considered cousins.

We are both in the people, place, and experience business.

The reason that my wife and I have been saving for the past 20 years to send our kids to college is not so that they can learn content, but so that they can receive a bundle of benefits.  Within that bundle is a credential, a degree, but there is also skills and knowledge and experience and networks and self-discovery.

Just as Hamilton The Movie (whenever it arrives) will not be Hamilton the Broadway show, MOOCs are not college.

The Broadway experience may scale even worse than a college experience.  (As it is not always clear to me that undergraduates really need to have foundational courses and 4 years of college within a traditional residential experience, but I digress).

Going to see Hamilton at the Richard Rogers Theater on West 46th street is, I imagine, a completely different experience than watching the show on a screen.

Higher education and Broadway are experiential goods.

Might it be possible that some colleges and universities, through their scarcities, are distorting the entire postsecondary market?

If admission to a few highly selective schools is so scarce (and expensive), what does this do to the majority of postsecondary institutions?

Yes, I know that the idea that highly selective schools distort the higher education market is amongst the least original of all higher education observations.  But as anyone tried to understand the dynamics of postsecondary education through a Broadway lens?

Have we looked to Hamilton to explain the problems of higher education?

Is it possible that there is a higher education Hamilton Effect?

Does this argument collapse in the face of evidence that Hamilton is drawing more fans to other Broadway musicals - growing the musical entertainment pie?  (Is there such evidence?)

What does Hamilton (the musical) tell us about higher education?


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