California Association for Institutional Research CAIR - Conference Fall 2019 Monterey, CA

Tools for Analyzing Instructional Costs Drivers in Academic Departments by

Differentiated Carnegie & Governance Groups

Tom Eleuterio, Higher Education Consortia Institutional Research & Effectiveness

tommyu@udel.edu

Delaware Cost Study Data & Research

Two decade study, focused at the academic discipline level, of faculty instructional workload and costs, sponsored research and public service from over 700 four-year, public and private non-profit higher education institutions

“The National Study of Instructional Cost & Productivity”, conducted annually by the Higher Education Consortia at University of Delaware. Results reported here from a grant for public policy research by the Smith Richardson Foundation

Research collaboration with the Education Policy Initiative Dr. Kevin Stange, University of Michigan and Dr. Steven Hemelt University of North Carolina- Chapel Hill

Three Motivations to Use Delaware Cost Study Data

• Student View: College prices ↑ 36% between 2008 and 2018 (College Board, 2018) − Student and parents now pay for >50% of costs (Desrochers & Hurlburt, 2016) − Concerns about access, persistence, indebtedness and value as an investment

• Administrative View: Improved understanding of cost differences by field, trends, and cost drivers is key tool for tempering future cost growth via intentional management

• Policy View: Better understating of costs à fuller picture of effects of policies such as financial aid, free college, and incentives to major in specific fields Example: High cost of instructing engineering majors is an important social and monetary cost of increasing STEM majors; a factor that is often ignored in policies promoting the tying of funding to high-earning occupations (Altonji & Zimmerman, 2017)

Many discussions of the cost of higher education only focus on the cost of tuition, state financing or federal financial aid. Few examinations of the cost of instruction that include differences in the cost of instruction across a range of academic disciplines have informed the larger conversation.

Top Concerns for College Presidents

“Presidents overwhelmingly believe the public’s skepticism is based on misunderstandings about colleges’ wealth, how much they charge (and spend) and the overall purpose of higher education.”

Top three concerns for senior leadership are all related to finances: budget and financial management (68%), fundraising (47%), and enrollment management (38%).

Our Study Sample • Process of constructing weights honed our sample; Identified outliers,

missing data patterns

• We focus a subset of 20 disciplines in the study 2000-2015

Cross-section (2013 – 2105): 7,245 obs → 3,307 programs →256 institutions

− Panel (2000-2015): 32,496 obs → 6,443 program, → 486 institutions

• Supplemented by IPEDS, OK Salary Survey, other sources

• Focus on 20 programs (CIP4 codes) using English (CIP 23.0101) as a reference for the other 19.

Questions and Analyses

1) What are the differentiated cost differences measured by direct instructional expenses (DIE) across selected fields of study?

2) What drivers account for cost differences by field? Decompose level and trend differences into 4 candidate drivers:

(A) Personnel costs per FTE instructor (B) Non-personnel costs (C) Faculty workload (D)Class size

3) Simulate four cost drivers by substituting those for English as an index

Cost per Student Credit Hour Weighted to Control for Institutional Size & Governance

Our Cross-section Study Focus

• Selected largely based on size, coverage, policy relevance

10,054

18,001

26,572

2,436

4,763

1,528

1,913

4,371

1,485

Computer/Info Sciences 3,729 1,493

Economics 7,034

Education 6,790 9,360

Electrical Engineering 4,388 2,638

English 13,466

Fine and Studio Arts 7,479

History 10,030

Mathematics 4,917 1,423

Mechanical Engineering 6,562 1,672

Nursing

Philosophy 1,950

Physics 1,560

Political Science 12,022

Psychology

Sociology 9,943

911

997

Avg. number of degrees produced each year during 2012 to 2015

Accounting 12,144

Biology 17,904

Business 20,980

Chemistry 4,577

Communication 17,565

DegreeType Doctors Masters Bachelors

0K 2K 4K 6K 8K 10K 12K 14K 16K 18K 20K 22K 24K 26K 28K 30K 32K

Avg. Number of Degrees by Type

Average of Number of Degrees by Type for each Cip4. Color shows details about DegreeType. The marks are labeled by average of Number of Degrees by Type. The view is filtered on DegreeType and Cip4. The DegreeType filter has multiple members selected. The Cip4 filter has multiple members selected.

Snapshot 2013 -2015: Cost Differences by Field

0.74

0.630.60

0.310.26

0.23 0.21 0.200.16

0.110.07

0.00

-0.02-0.05

-0.09 -0.11-0.18 -0.18

-0.22-0.25

-.4-.2

0.2

.4.6

.8%

diff fr

om En

glish

Electrical Engineering

Nursing

Mechanical Engineering

Education

Fine/Studio Arts

Biz Admin/Mgmt/Operations

Computer/Info Scie

nces

AccountingPhysics

ChemistryBiology

English

Poli Sci/G

overnment

EconomicsHisto

ry

Comm/Media Studies

Psychology

Sociology

Philosophy

Mathematics

Similar Stories Emerge …

-.50

.51

-.50

.51

-.50

.51

-.50

.51

1 2 3 4 5 1 2 3 4 5 1 2 3 4 5 1 2 3 4 5 1 2 3 4 5

1 2 3 4 5 1 2 3 4 5 1 2 3 4 5 1 2 3 4 5 1 2 3 4 5

1 2 3 4 5 1 2 3 4 5 1 2 3 4 5 1 2 3 4 5 1 2 3 4 5

1 2 3 4 5 1 2 3 4 5 1 2 3 4 5 1 2 3 4 5

Accounting Biology Biz Admin/Mgmt/Operations Chemistry Comm/Media Studies

Computer/Info Sciences Economics Education Electrical Engineering Fine/Studio Arts

History Mathematics Mechanical Engineering Nursing Philosophy

Physics Poli Sci/Government Psychology Sociology

% d

iff re

lativ

e to

Eng

lish

1: Actual difference; 2: Equate other exp; 3: Equate salary; 4: Equate workload; 5: Equate class size

Trends in Faculty Mix

0.2

.4.6

.80

.2.4

.6.8

0.2

.4.6

.80

.2.4

.6.8

2000 2005 2010 2015 2000 2005 2010 2015 2000 2005 2010 2015 2000 2005 2010 2015 2000 2005 2010 2015

Accounting Biology Biz Admin/Mgmt/Operations Chemistry Comm/Media Studies

Computer/Info Sciences Economics Education Electrical Engineering English

Fine/Studio Arts History Mathematics Mechanical Engineering Nursing

Philosophy Physics Poli Sci/Government Psychology Sociology

Tenure/TT Other Supplemental

Teaching assistants

% F

acul

ty s

hare

Year

Weighted by SCH*IPW

Impact on Public Opinion and Policy

https://www.marketwatch.com/story/why-it-costs-colleges-far-more-to-educate-a-physicist-or-teacher-than-an-english-major-2019-02-13?mod=jillian-berman

2000 - 2015

Cost per student credit hour summarizes four basic cost drivers related to instruction

Workload based on fall semester teaching activity excluding lab sections

Class size is the ratio of fall semester student credit hours divided by three per class section

Salaries are expressed in 2015 dollars using CPI-U

Other than personnel expenses in support of instruction generally range between 3% and 10% of the total direct

instructional expenditures

Snapshot 2013 -2015: Cost Differences by Field

0.74

0.630.60

0.310.26

0.23 0.21 0.200.16

0.110.07

0.00

-0.02-0.05

-0.09 -0.11-0.18 -0.18

-0.22-0.25

-.4-.2

0.2

.4.6

.8%

diff fr

om En

glish

Electrical Engineering

Nursing

Mechanical Engineering

Education

Fine/Studio Arts

Biz Admin/Mgmt/Operations

Computer/Info Scie

nces

AccountingPhysics

ChemistryBiology

English

Poli Sci/G

overnment

EconomicsHisto

ry

Comm/Media Studies

Psychology

Sociology

Philosophy

Mathematics

Snapshot 2013 -2015: Cost Differences by Carnegie Class and Institutional Governance

-.4-.2

0.2

.4.6

.81

% dif

f from

Englis

h

Electrical Engineering

Nursing

Mechanical Engineering

Education

Fine/Studio Arts

Accounting

Chemistry

Biz Admin/Mgmt/Operations

PhysicsBiology

Computer/Info Scie

nces

Poli Sci/G

overnment

Economics

Sociology

Comm/Media StudiesEnglish

History

Mathematics

Psychology

Philosophy

Pri research Pri comprehensive Pri bacc

Pub research Pub comprehensive Pub bacc

Differentiated Cost Differences by Carnegie Class and Institutional Governance Magnifies Percentage Gaps ( 2013 – 2015)

Privately Governed Research Institutions Have Largest Differences in High Cost Disciplines

-40

-20

0

20

40

60

80

100

Percentage Different from English by Carnegie and Governance

Private Research Public Research

Publicly Governed Comprehensive Institutions Have Largest Differences in High Cost Disciplines

-40

-20

0

20

40

60

80Percentage in Cost For English for Comprehensive Institutions

Private Comprehensive Public Comprehensive

How does the cost driver analysis differ for undergraduate focused institutions?

-50

-40

-30

-20

-10

0

10

20

30

40

50

60

Instructional Cost Percentage Different from English Sorted by Carnegie Baccalaureate Groups

Private bacc Public Bacc

Seven disciplines have costs above English for both publicly and privately governed institutions

0

10

20

30

40

50

60

Nursing Physics Education Fine/Studio Arts Biology Computer/Info Sciences Chemistry

Instructional Cost Percentage Different from English Sorted by Carnegie Baccalaureate Groups

Private bacc Public Bacc

Five disciplines show higher costs than English in publicly controlled institutions with the opposite in privately controlled

-40

-30

-20

-10

0

10

20

30

40

50

60

Poli Sci/Government Biz. Admin/Mgmt/Operations Economics Accounting Comm/Media Solutions

Instructional Cost Percentage Different from English Sorted by Carnegie Baccalaureate Groups

Private bacc Public Bacc

Five disciplines are less expensive than English for both privately and publicly governed institutions

History Mathematics Philososphy Sociology PsychologyPrivate bacc -16 -20 -30 -30 -36Public Bacc -17 -22 -5 -28 -17

-40

-35

-30

-25

-20

-15

-10

-5

0

Private bacc Public Bacc

4 ratios help to determine if an academic department has adequate resources

• How does class size measure as student credit hours per FTE instructor compare with similar programs?

• How does workload for regular instructional faculty compare with departmental peer benchmarks?

• What percent of instructional costs are for non-personnel expenses compared to discipline-focused averages?

• What level of compensation ( salaries and benefits) is provided as reflected in cost per student credit hour?

1) USE ENGLISH AS AN INDEX BY FIRST COMPUTING THE COST PER STUDENT CREDIT HOUR (SCH) IN THE TARGET DISCIPLINE AS A PERCENTAGE OF THE COST PER SCH FOR ENGLISH AT THE SAME INSTITUTION. 2) COMPUTE A SIMILAR INDEXED PERCENT FOR THE SPECIFIC TARGET DEPARTMENT OTHER THAN ENGLISH USING THE COST PER STUDENT CREDIT HOUR WITH THE AVERAGE FOR ENGLISH IN THE CARNEGIE AND GOVERNANCE GROUP. 3) COMPUTE THE DIFFERENCE OF THE INDEXED PERCENTAGES FOR A THE TARGET DEPARTMENT AND ENGLISH TO OBTAIN THE STANDARDIZED PERCENT ABOVE OR BELOW THE COST PER SCH TO TEACH ENGLISH.

Identify cost differences with respect to English then examine how the four cost drivers contribute to the total

Case Study: When English is set equal to ( within 1%) in cost to the average for small BAS, privately governed institutions. Art is 161% more expensive per SCH than English at the at other small privately governed institutions. The four cost drivers will reveal why.

Our case study art department pays salaries and benefits that are 14%

higher than the Carnegie & governance group average

The art department spends 5% more on instructional materials and other non-personnel items than similar departments

The art department teaches almost 30% fewer class sections than art departments in the same Carnegie and governance group; this is approximately one fewer class per FTE instructional faculty member

The art department teaches a small percent more student credit hours per faculty than the group

Use the web portal to benchmark with three-year averages

Table 3 standard cost study teaching ratio comparisons in the web portal provide complementary information

Three year averages in the web portal or peer group reporting provide context and comparisons

Class sections comparisons with a three year average

The number of class section for tenure / tenure track FTE is 0.74 sections smaller than the three year average

Table 4 Cost ratio three year averages in web portal reveal differences in cost per student credit hour and personnel % of DIE