The Economic Value of Main Report

Appendix 2: Glossary of terms

Alternative education

A “ with ” and “ without ” measure of the percent of students who would still be able to avail themselves of education if the college under analysis did not exist. An estimate of 10%, for example, means that 10% of students do not depend directly on the existence of the college in order to obtain their education. A measure of how monies that are currently used to fund the college might otherwise have been used if the college did not exist. Capitalized value of a stream of future returns. Asset value measures what someone would have to pay today for an instrument that provides the same stream of future revenues. Rate at which students leave the workforce due to out-migration, unemployment, retirement, or death. Present value of benefits divided by present value of costs. If the benefit-cost ratio is greater than 1.0, then benefits exceed costs, and the investment is feasible. What would have happened if a given event had not occurred. In the case of this economic impact study, the counterfactual scenario is a scenario where the college did not exist. Credit hour equivalent, or CHE, is defined as 15 contact hours of education if on a semester system, and 10 contact hours if on a quarter system. In general, it requires 450 contact hours to complete one full-time equivalent, or FTE. Relationship between the market price of education and the volume of education demanded (expressed in terms of enrollment). The law of the downward-sloping demand curve is related to the fact that enrollment increases only if the price (tuition and fees) is lowered, or conversely, enrollment decreases if price increases.

Alternative use of funds

Asset value

Attrition rate

Benefit-cost ratio

Counterfactual scenario

Credit hour equivalent

Demand

Discounting

Expressing future revenues and costs in present value terms.

Earnings (labor income)

Income that is received as a result of labor; i.e., wages.

Economics

Study of the allocation of scarce resources among alternative and competing ends. Economics is not normative (what ought to be done), but positive (describes what is, or how people are likely to behave in response to economic changes).

The economic value of Monroe Community College

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