April 4, 2011 5 Comments
Today’s Guardian carries a piece entitled Plans for tuition fees in disarray, ministers say. There is concern that many universities are planning to charge students fees of more than £6,000, which means that the average of £7,500 for which the Government had budgeted is looking inadequate. The implications for public spending are considerable. The piece contains the following observation:
Privately, ministers admit they have become victim of the so-called Giffen good, an economic theory in which people consume more as the price rises.
This statement is a worry. It certainly lends support to the argument that a little knowledge is dangerous. If higher education were a Giffen good then that would be a groundbreaking finding in economics. It would be surprising: not least because no one seems to have spotted it before. Read more of this post