Educational projects evaluation: willingness to pay vs social utility

In this paper the “willingness to pay” (wtp) approach and the utilitaristic one are compared in order to evaluate an educational project, such as an investment in human capital. In the first part, the differences between the two approaches are underlined. In the second part we show the important rol...

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Bibliographic Details
Published in:Procedia, social and behavioral sciences social and behavioral sciences, 2010, Vol.2 (2), p.1437-1446
Main Authors: Colantonio, Emiliano, Furia, Donatella, Mattoscio, Nicola
Format: Article
Language:English
Subjects:
Education
evaluation
human capital
social utility
willingness to pay (wtp)
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Summary:In this paper the “willingness to pay” (wtp) approach and the utilitaristic one are compared in order to evaluate an educational project, such as an investment in human capital. In the first part, the differences between the two approaches are underlined. In the second part we show the important role that education can play on the probability of finding a job. In the third part a suitable model is introduced and the conditions under which the wtp approach systematically overestimates (or respectively underestimates) the social value of an educational program are shown. In all the considered cases, however, the wtp criterion seems not to be a suitable measure of educational social welfare.
ISSN:1877-0428
1877-0428
DOI:10.1016/j.sbspro.2010.03.215