ANOUNCEMENT

COURSE INTRODUCTION

Why is this so? It is due to the central importance of such a course to Distance Education professionals in decision making positions. Especially in the private sector (but increasingly also in public institutions) any suggestions for change and innovation have to be costed. Both, the request to make efficiency gains as well as the request  to raise quality,  have cost implications.

The Economics of Distance Education course equips students with the central concepts of cost-analysis. Though in complex organizations the knowlege which can be acquired in this course will be no substitute for an accountant specialist, it is intended to make the Distance Education professional a competent partner in the process of costing. This is a central competence given that each suggestion for change is most certainly accompanied by the question “And how much will it cost?”

Costing is about numbers. Often this is sufficient to make people shy away from a course like this, though they are ready to admit its relevance. However, given available  spreadsheet tools, the mechanics of costing can be kept to a minimum. We therefore have decided to make the availability of Excel a course requirement. We do not expect mastery of Excel. As far as possible, we will assist participants with little prior knowledge of Excel to acquire the necessary skills to use Excel not only as a calculation but also as a modeling tool. This adds an interactive and explorative dimension to the dry tables of a textbook.

The course consists of an introductory part of two weeks followed by three four-week modules which are rounded up by a final week of reflection and self-assessment. The 1st  module introduces the major cost analysis techniques, the 2nd module applies these techniques to the issue of cost-effectiveness and cost-efficiency of distance education institutions, and the 3rd module treats the costs of educational media in distance education including the costs of online learning.

The course starts with an introduction (week 1 and 2) into the economics of education in general (most importantly the ‘human capital theory’) and links it to distance education: While economics of education uses the analytical tools of economics to analyze education theoretically, distance education presents itself as a possible answer which seems to be better consistent with the demand for mass education by adapting management and production methods which have proved successful in economics (e.g. manufacturing) and applying them to education.

The 1st module (weeks 3, 4, 5 and 6) introduces the instruments of cost analysis and applies them to distance education institutions. After an introductory analysis of distance education as a system, the student classifies resources, applies to them the main cost categories and handles the basic costing model. Special attention is given to the treatment of capital costs and overheads.

The 2nd module (weeks 7, 8, 9 and 10) applies the resulting conceptual framework and   modeling tools, to address questions of cost-efficiency and cost-effectiveness to distance education institutions. Case studies are reviewed and implications for management and planning are identified. The highlight of this module will be a week of conferencing with Professor Greville Rumble who is not only a world renowned expert in the area of the economics of distance education but also the author of the core textbook. Participants may raise questions related to the textbook and take part in an online seminar on the respective advantages of dedicated or dual mode distance education institutions.

The 3rd module addresses the problem of costing educational media including online learning environments. The choice of media is a main cost driver in educational provision. The main classes of media are analyzed. Participants analyze the cost of media using 'cost per student learning hour' as indicator which facilitates the comparison of the costs of different media. Media are classified into resource media and communication media which have different cost structures. Benchmark cost data are presented. A spreadsheet model for rapid cost appraisal is introduced.Finally, the specific problems of costing online learning environments are addressed. Some case studies are discussed which allow to infer some benchmark figures.

COURSE GOALS AND OBJECTIVES

At the end of the course students should have achieved the following objectives:

1. The student understands the conceptual framework and the main tenets of human capital theory, a core theory of economics of education.
2. The student identifies the cost drivers in distance education systems and is able to measure their costs.
3. The student is able to treat capital costs and handles the basic cost model.
4. The student analyzes and compares the costs of media.
5. The student handles the basic cost model for rapid cost appraisal of a selected media configuration.
6. The student reviews the case study evidence for distance education to be cost-effective.

REQUIRED TEXTBOOKS

COURSE REQUIREMENTS

• ensure technical access to Webtycho (the digital learning environment of UMUC)
• ensure availability of a spreadsheet facility compatible with Excel 97-SR1

GRADING POLICY

Grades are assigned according to the following:

A for 90 - 100% - Excellent
B for 80 - 89% - Good, meets Standard
C for 70 - 79% - Below Standard
F for 0 - 69% - Failure

The grade of "B" represents the benchmark for the Graduate School. It indicates that the student has demonstrated competency in the subject matter of the course, i.e., the student has fulfilled all course requirements on time, has a clear grasp of the full range of course materials and concepts, and is able to present and apply these materials and concepts in clear, reasoned, well organized and grammatically correct responses whether written or oral.

Only students who fully meet this standard and, in addition, who demonstrate exceptional comprehension and application of the course subject matter, merit an "A".

Students who do not meet the benchmark standard of competency fall within the "C" range or lower. They, in effect, have not met graduate level standards. Where this failure is substantial, they earn an "F".

The grade of "I" (Incomplete) is exceptional and given only to students whose completed coursework has been qualitatively satisfactory but who have been unable to complete all course requirements because of illness or other extenuating circumstances beyond their control. The grade of "I" may be considered only for students who have completed at least fifty percent (50%) of the total coursework requirements and who have received a passing grade on all the coursework which they have completed. The instructor retains the right to make the final decision on granting a student's request for an "I", even though the student may meet the eligibility requirements for this grade.

Writing standards

Policy on Academic Integrity (Plagiarism)

The penalties for plagiarism include a zero or a grade of "F" on the work in question, a grade of "F" in the course, suspension with a file letter, suspension with a transcript notation, or expulsion.

Note: Work submitted for this class must be your own, and it must be original to this course. If you have questions regarding this stipulation, please consult instructor.

Disabled Students

Portfolio

COURSE OUTLINE

For each module a conference is opened. The conference space is structured by a number of main topics. Most of them can be inspected right from the beginning of the course. This allows the participant a flexible management of his/her study time. Generally, the first three weeks of a module are dedicated to reading and conferencing while the 4th week is reserved for assignment writing.

Introduction: The Expansion of Education and the Emergence of the Economics of Education

While a number of technical issues will have to be addressed during the first week, we  proceed soon to the course content. What is the rationale behind the unprecedented expansion of education? Education can be seen as an investment with very real returns to the individual as well as to society as a whole. Private demand rises and there seems little reason to discourage it. But to satisfy a mass demand for education, giving the scarcity of resources, leads to the question of the most cost-effective provision of education. Distance education seemed to suggest some annswers to this problem. Using rational production techniques, including division of labor and the application of media and technologies, distance education may seem to emulate the success of industrialized manufacture of high quality consumer goods.

This relation between the core theory of economics of education which suggests to view education as an investment ('Human Capital Theory'), the postwar, historically unprecedented and worldwide expansion and education, and the emergence of distance education sets the scene for the questions of this course.

Management issues and  objectives:

• The students are introduced to the course set-up
• Students and faculty introduce themselves to each other
• Students are introduced to the online Masters program
• Students are introduced to the Economics of Distance Education course
• Students are introduced to the main tenets of the economics of education
• Students relate the emergence of distance education to the growing demand for education

Required reading:
Either from the set textbooks or provided electronically

SCHULTZ T W Investment in Human Capital in: American Economic Review, vol. 51 (1961), pp. 1-17
PERRATON H Expansion and constraint in: PERRATON H 1999 Open and Distance Learning in the Developing World Routedge, London, pp 4 – 9
PETERS O: Distance education and industrial production: a comparative interpretation in outline Chapter 5 in: KEEGAN D (ed) 1994 Otto Peters on Distance Education The Industrialisation of Teaching and Learning Routledge, London and New York pp 107-126
 
 

Module 1: The Techniques of Cost Analysis

Module 1 introduces the basic concepts and techniques of costing. We start with a  view of distance education as a system and by identifying the major components of this system. We then define the main classes of resources required in each component. Each  resource  must be costed. A number of cost categories are defined and applied. This finally leads to a model which allows us to study the behavior of costs when changing the volume of activities.

Special emphasis is given to the issues like capital costs, overheads and cost attribution of joint products.

Objectives:

1. Students analyze distance education as a system and identify its main components.
2. Students classify resources (including human resources, premises, equipment and stocks)
3. Students classify costs according to the main cost categories (fixed and variable costs, capital and recurrent costs, opportunity costs).
4. Students handle the basic cost model to explore the effects of the different cost categories on average cost per student.
5. Students describe different options for treating capital costs

Required readings:
Either from the set textbooks or provided electronically

RUMBLE G 1997 The Costs and Economics of Open and Distance Learning Kogan Page, London pp 1 – 77

Assignment
Due date: End of module 1
 
 

Module 2: The Cost-effectiveness of Distance Education

Note: During Module 2 Professor Dr. Greville Rumble, the author of one of our core readings, will be our visiting expert.

This module applies cost analysis to distance education institutions. Using 'cost per student' and 'cost per graduate' as an proxy indicator for cost-effectiveness we will examine the method of analyzing institutional cost-effectiveness. We review case study evidence for the claim of distance education being a cost-effective means of educational provision.

Management guidelines to monitor the cost-effectiveness of distance education are suggested.

Objectives

1. Students summarize the methodology of cost-effectiveness analysis of distance education systems.

1. Students identify the most important indicators of measuring institutional effectiveness (cost per student and cost per graduate).
2. Students identify the different steps in cost analysis of distance education institutions

2. Students summarize the evidence for the cost-effectiveness of distance education

1. Students examine the evidence of the cost-effectiveness of open universities
2. Students summarize the evidence for the cost-effectiveness of distance teaching for ‘school equivalency’ (the World Bank/UNESCO case studies).

3. Students identify different institutional forms of distance education. In particular:

1. Students distinguish between dedicated mode, dual- and mixed-mode, networks and consortia.
2. Students examine the implications of these modes on the cost structures of the respective institutions.

4. Students identify planning guidelines for ascertaining the cost-effectiveness of distance teaching institutions.

Required readings:
Either from the set textbooks or provided electronically

RUMBLE G 1997 The Costs and Economics of Open and Distance Learning Kogan Page, London pp120 - 204
especially Chapter 13: Cost-efficiency, and Chapter 14: Cost-effectiveness.

Assignment
Due date: End of module 2
 
 
 

Module 3: Costing Educational Technologies

Module 3 addresses the issue of costing or educational technologies or media. After some methodological considerations on how to cost educational technologies and the introduction of 'cost per student  learning hour' as a measure to facilitate cost comparison, we classify media in two major categories. The first category, 'resource media' tefers to unidirectional media which can be replicated  as objects, e.g. books, cassettes, CD-ROMs. Resource media are more likely to generate economies of scale. Communication media, on the other hand, which link a student and a teacher or tutor are less prone to generate similar economies.

For each of the two major types of media we examine their cost structure, look at some cases and identify some benchmark cost figures,  using cost per student learning hour as unit of measurment. Further, we explore the use of spreadsheets as a management tool for rapid cost appraisal. Finally, we address the specific issue of online learning environments where the distinction between resource and communication media becomes blurred. Some case studies analyzing online learning courses are discuseed.

Objectives

1. Students determine cost per learning time as an indicator to compare costs of media.
1. Students identify ‘cost per student learning hour’ as a common unit of measurement.
2. Student identify learning time as a relevant educational parameter.
2. Students identify ‘cost per student learning hour’ for resource media.
1. Students compare the fixed costs of development for various resource media (including print, broadcasting media and cassettes).
2. Students compare the unit costs of various resource media (including print, broadcasting media and cassettes).
3. Students assess the potential for scale economies of the respective resource media.
3. Students identify ‘cost per student learning hour’ for communication media.
1. Students identify the cost drivers of communication media (e.g. CMC )
2. Students determine the cost structure of synchronous communication (e.g. videoconferencing).
4. Students use a spreadsheet to explore the cost behavior of different combination of media
5. Students identify specific design features of of computer based learning and some benchmark costs.
6. Students discuss some case studies of online learning courses.

BATES AW  Selecting technologies,  in: BATES AW 1995 Technology, Open Learning and Distance Education Routledge, London pp 33 - 60
HÜLSMANN  T  2000 The Costs of Open Learning: a Handbook BIS, Oldenburg

Assignment:
Due date: End of 3rd module