Measuring Value Add of Universities

There is constant debate about the quality of Universities. Some people measure it solely by how well the graduates perform while others argue that one must measure the value added by the University. This debate applies to all educational organisations including schools (especially when it comes to ranking schools). But the difficulty is in measuring the value added.

To measure the value add, one has to try to identify how a person would have performed if they had not obtained a qualification from the University and compare it with the person’s performance after they had obtained a qualification from the University. A scientific way to address this question is to conduct an experiment with a control group. One could have two groups of school leavers who have been identified to have the same ability. One group will attend the University A and the other group will attend University B. One then measures the graduate outcomes for the two groups. This is clearly very difficult to conduct in real life.

If University A has very high admission standards (say they accept only 1% of the applicants), one needs a group of students who would have qualified for University A but choose not to attend University A and opt for University B. Given that University A is likely to have a solid reputation, the number of students willing to give up the opportunity to attend University A will be vanishingly small. So it will be hard to conclude that the group of students admitted have similar ability. Here ability is not just academic knowledge – it could be the drive to work hard, personality traits such as resilience when faced with adversity etc.

Furthermore there is no agreement on what is meant by graduate outcomes. A lot would depend on the career goals of the students. These goals could change as the student progresses through their studies and get exposed to different options. So more students from University A might show an entrepreneurial flair than from University B because University A while more students from University B might undertake a research career.

Given the difficulty (or impossibility) of conducting a control experiment, one has to rely on other techniques. But perhaps that is a topic for another blog.

Personally I feel trying to measure the reputation of a University by its value add is not going
to work. The only acceptable measure is what others say about the graduates from the University.

Toxic Students and Zombie Universities

The term Toxic asset popularised by the global financial crisis represents financial assets whose value has fallen to a level where the holder wants to get rid of it but has no value in the market. Such assets cannot be sold and the holder
has to take the loss.

Another term, not as popular as toxic asset is
Zombie Bank. It describe banks which own a vast amount of
toxic assets. So they would have become bankrupt if such assets are re-valued to match current realistic levels.

The education sector can have its own toxic students and zombie universities if it is not careful.

Here is my definition of a toxic student.

A student whose chance of graduating with a degree is very low but continues to enroll in the various subjects in the faint hope that some qualification may be open to them or a student who has obtained a degree but cannot get a job or and is not
qualified to undertake quality higher education.


Why are such student toxic? Ultimate the value of a student to the university is defined by the market place (either the work force or admission into a high quality higher degree). I do not include the ability to pay fees or attract other funding which is equivalent to fees to represent value to the university. Thus a student who just continues in the university system
or has come an alumnus but has no future career based on their qualification has no market value.
A university that has many toxic students will soon be classified as a zombie. Since the toxic students have no market value, the university might be tempted to keep such students enrolled in various programmes especially if they represent a positive cash flow during their enrollment period.

Once an educational organisation gets the reputation of being a zombie university, good students will avoid it and the university will spiral to be a perpetual zombie. Publicly funded zombie universities will get generous government bail outs. Private zombie universities may have to declared insolvent if it cannot attract enough students.

From personal experience the only way to avoid the creation of toxic students is to have high entry requirements and strict progress requirements while at university.