The University Professor as a Utility Maximizer and Producer of Learning, Research, and Income

Abstract

Numerous plans have been proposed for improving the teaching quality at major universities. These schemes typically do not rest on identifiable economic models. In this paper, a professorial decision-making model is presented for the purpose of exploring alternative plans to raise teaching quality. Using a Lancaster methodology, where time is a variable input, it is demonstrated that an increase in the pecuniary return to teaching will raise teaching quality while exogenous changes in teaching and/or research technology need not. The slack academic market for Ph.D.'s, the difficulty in securing state financing, and falling undergraduate enrollments have led to many speculations and proposals for appropriate methods to improve the quality of college teaching. In the case of economics, the American Economic Association, via its Committee on Economic Education, is emphasizing the development of better alternative university teaching technologies (for example, improved course content and teaching techniques). Siegfried and White [12, p. 315], however, question the effectiveness of improved technology: . .. we are not optimistic that instruction at these schools will be noticeably improved a further outpouring of new teaching techniques. They state that an alternative way of improving instruction might be to devise means of capitalizing on the research orientation of the university professor and the associated research-oriented reward structure at large universities. This suggestion is not based on an identifiable economic model, but rather on the observation that contemporaneous The author is an Assistant Professor and Director of Economic Education at the University of Minnesota. * Constructive criticism of an earlier draft was provided John Danforth, John Hause, Jack Rodgers, Jim Simler, and other members of the Fall 1973 Minnesota Human Capital Workshop. Jack Rodgers was of special assistance in rechecking algebraic manipulations and implications. [Manuscript received February 1974; accepted August 1974.] The Journal of Human Resources * X * 1 This content downloaded from 207.46.13.86 on Sun, 16 Oct 2016 04:43:39 UTC All use subject to http://about.jstor.org/terms 108 I THE JOURNAL OF HUMAN RESOURCES teaching output is statistically less significant in salary determination than is cumulative research output. Based on a two-dimensional argument involving only professional research and teaching time considerations, Richard McKenzie [11, p. 617], on the other hand, suggests . . . that if more research is desired, an appropriate policy may be to increase the maximum teaching [time] requirements; if more teaching [time] is desired, administrators should consider, along with other changes, raising the research [time] requirements. To follow McKenzie's argument, it is necessary to assume, in addition to standard assumptions, that (1) a professor can be forced into spending a given maximum amount of time in teaching and research activity while his income is fixed regardless of total time assigned; (2) the professor's two-dimensional preference ordering can be summarized a circular indifference surface; and (3) the professor is operating in the inefficient region of his indifference surface. A more direct plan to improve the quality of college teaching has been elaborated Kenneth Eble [3, pp. 21-35]. Eble's plan rests on the speculation that an increase in the pecuniary return to teaching, given accepted evaluation instruments and procedures, will improve the quality of teaching, but not necessarily at the expense of research.' Such speculation, however, is questioned William Arrowsmith [1, p. 58]. He advocates viewing the professor as a Socratic teacher, and he concludes that we will not raise college teaching quality by the meretricious device of offering prizes or bribes. As yet, no one appears to have specified in a formal manner the alternative economic determinants for improving the quality of college level teaching. All that we do have are conflicting verbal speculations as to the possible means of improving instruction. In this study, a formal comparative static model is presented for the purpose of exploring the implications of alternative plans to raise teaching quality. Based on a Lancaster [8, 9] methodology, where time is a variable input, it is demonstrated that an increase in the pecuniary return to teaching output will raise teaching quality at major universities while exogenous changes in teaching and/or research technology need not. Empirical methods of testing this model are also suggested. PROFESSORIAL DECISION-MAKING FRAMEWORK It is generally accepted that a professional not only derives utility from consumption activity, but also acquires satisfaction out of professional activities-in 1 Hansen and Kelley [6, pp. 11-12] also predict that an increase in the relative reward for teaching will increase the output of this activity. Their prediction rests on some unspecified relationships in which a change in the relative return to teaching-psychic and pecuniary-does not affect the production possibility set, but only causes a change in the marginal rate of substitution between teaching and research in the utility function. This content downloaded from 207.46.13.86 on Sun, 16 Oct 2016 04:43:39 UTC All use subject to http://about.jstor.org/terms

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