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An Educator’s Guide to Opportunity Cost and Rational Choice Theory, or “How I Learned to Continue Worrying but Advocate for TFA Reform (Instead of Total Dissolution)”

with 4 comments

This post is inspired by every blog post, newspaper article, peer reviewed journal, nonprofit organization, website, message board post, speech, coalition, informal conversation, formal debate, radio show, expose, and TV news hour that advocates or opposes an education policy. The issues of opportunity cost and mutual exclusivity are either ignored or misunderstood.

I attempt to answer these questions:

  • How should our understanding opportunity cost influence our decision-making about education policies?
  • How do we define mutual exclusivity in education?
  • How do these issues apply to our debates about TFA?

Opportunity Cost and Cost-Benefit Analysis

The concept of opportunity cost is important to all decision-making processes The opportunity cost of a course of action is the forgone benefit from an alternative action. In order for a benefit to be forgone, the chosen and alternative actions have to be mutually exclusive. This means that one cannot do both actions act the same time. Our lives are made up of choices about mutually exclusive actions, from deciding to go to college instead of working full-time for four years, to choosing between coffee and tea during a quick break. Opportunity cost can be computed in terms of anything – including money, ice cream cones, love, life experience, friendship, and “achievement”. The concept of opportunity cost reflects the scarcity of our resources – especially time and money. When we integrate opportunity cost into our decision-making, we ensure the most efficient use of our scarce resources.

In order to figure out the true value of any decision, a decision-maker does a cost-benefit analysis (often subconsciously). We must account for the “up front benefits” of an action and factor in forgone benefit. The forgone benefit is subtracted from the “up front benefit”. I define “up front benefit” as the difference between the value of an action and its price: the tangible value that a decision-maker receives from their choice. Although this is most often computed in monetary terms, it can be computed in terms of anything: from nutrition to abstract feelings of happiness. To find the true value of any action, subtract forgone benefits from “up front benefits”:

Computing the True Value of an Action

Here is a more complex example:

Maggie can choose between working at a job that pays a $30,000 salary or raising her initial income potential 60% (to $50,000) by attending a 4 year institution. In her case, maximum earnings potential without a college degree is $35,000, and $75,000 with a degree.  The institution costs $10,000 per year to attend (after scholarships and aid).

From these examples, we see:

  • We can maximize the true value of an action by minimizing costs (both “up front” and forgone).
  • Cost-benefit analysis are influenced by time. Time can add value (example: appreciation of the value of antiques, interest from the bank, job promotions) or decrease the value (example: depreciation of a car).
  • It is not easy to calculate cost and value. Maggie might have had non-monetary value or costs. For example, the university might be far from home and prevent her from seeing family. Most of the time, forgone costs is are not monetary. There are also issues of commensurability: how do we weigh the monetary versus the social costs of an action? (My former debate coach asks “Which is larger? A horse head or a furlong?” to help debaters understand this issue.)

Applying Opportunity Cost to Education Policy Debates

During a debate about TFA JR Atwood and I had on his playthink blog, we discussed the opportunity cost argument against TFA:

Educatorblog: The cost of the TFA program is so high that there is a huge opportunity cost. TFA is not cheap to run (I read an article that said that when you calculate finders fees, the recruitment process, salaries, etc – it costs more than $125,000 per year for each placement). I’m tired of the ‘what we’re doing is better than doing nothing’ argument – if we took the money that the government and private donors send to TFA each year and invested it in programs that help veteran teachers adapt to new populations, other recruitment programs (like Oakland Teaching Fellows, New York Teaching Fellows, etc), reforming teacher preparation programs, etc – we could get more bang for our buck. In education, getting more bank for our buck translates into better education experiences for underserved students.

JR Atwood: …..I do not agree, however, that if we were to take the money from TFA and invest it into other teacher prep programs that we — or our children — would necessarily be better off. First, the money spread among various educational initiatives is not zero-sum. Just because TFA gets some money does not mean that, absent their existence, another program would. This is like saying, “Instead of spending all this money on the Iraq war, we should spend it at home.” Sounds good and I agree with the spirit of the argument. But if we stopped funding the war, its current budget would not necessarily be distributed among domestic social service agencies.

Touche, JR. A successful argument about opportunity cost has two components:

A. An explanation of why actions are mutually exclusive.

B. An explanation of how one alternative is better than the other (this is the subject of our debate and my (obligatory edublogger) TFA post).

Showing the negatives of TFA isn’t enough. I have to explain how dedicating resources to TFA forfeits the supreme benefit of other policy solutions.

Mutual Exclusivity in the World of Education Policy

The world of education is not like a child with $5 in a candy store – opportunity costs are not clear. Although the scarcity of resources is a primary factor in decision-making and there are tangible consequences, it is hard to figure out how the adoption of one policy precludes the implementation of other policies. We’ve erected the concept of “achievement” to help us quantify how students experience the consequences of our policies – but there are many other ways to understand costs and values (the list goes from concrete to abstract):

  • Time (could go at the top or bottom of the list)
  • Money
  • Physical safety
  • Achievement
  • Social services (health care, sex education, college and career consulting, etc)
  • Learning
  • Fair distribution of social and economic opportunity
  • Rights promotion
  • Community-building and local support
  • Emotional and mental stability
  • Happiness and fulfillment

None of the items on this list are mutually exclusive. Physical safety goes hand in hand with emotional stability. Students aren’t happy unless they feel like they are apart of a larger community that values their perspective. It takes money and time to achieve all of these goals.  Policies – both nuanced (example: a school’s decision about uniforms) to sweeping (example: No Child Left Behind) – influence each other’s execution, benefits, and costs. For example, clauses about science-based researched reading interventions in NCLB have precluded the adoption of interventions that are not scripted (as of now, the only interventions that are deemed “well-researched” by the government are scripted learning programs). NCLB’s requirements have changed the dynamics of instruction – from time spent on subjects to how students are taught. A nuanced policy can also impact other policies: a teacher’s behavior management style influences physical safety, achievement, learning, and community-building.

JR is right about money – although money and time represent large costs, it is nearly impossible to say that taking funds away from one program will automatically lead to the funding of a better program.  Revolution has a substantial failure rate. Lawmakers and voters might not understand how to spend the money more effectively. Also, there is the issue of private money in education. Private donors can call into the same traps as lawmakers – especially when dealing with the distribution of public goods.

Most of the time, the question of mutual exclusivity is really about how a particular policy disrupts the implementation of policies that are already in action and have proven results. When people think of “failing” schools, they imagine a situation where everything is wrong – the teaching methods, environment, curriculum, etc. In reality, there are things that work  and things that don’t. In troubled schools, the consequences of models that don’t work outweigh the consequences of models that work. Sometimes, it is a wise policy decision to expand or fully-fund working elements instead of trying to create a whole new paradigm (this argument is used for NCLB). Also, it is rare for lawmakers to dismantle programs and more likely that new interventions will exist on top of old ones. There is also political mutual exclusivity: does the presence of TFA stop lawmakers and schools from undertaking better reforms?

Dismantling TFA is not a direct path to the reforms we want to see (better pay, institutional support, better teacher education programs, etc). We need to ask ourselves: how can a reformed TFA help us meet our  education reform goals?

Since before TFA’s inception, at-risk students have been subjected to an endless stream of substitute teachers and emergency certified teachers. Most of the time, these teachers have little experience or preparation. lf these substitutes and emergency certs have less experience with children than the average TFA recruit, is it a sound policy to place TFA teachers with these students? In studies where the uncertified teacher pool had less experience  than TFAers, TFAers outperformed their uncertified counterparts. Many make the argument that TFA increases the propensity of school districts to choose uncertified teachers over certified ones – if this is true, then TFA must be dissolved (we should do studies about how budget cuts and shifts in the availability of ‘cheap teachers’ influences hiring and firing). TFA should meet the same fate if it is a ploy by lobbyists to decrease public spending in education (no matter the true cost).

Can a reformed TFA make the transition from stop-gap measure to adaptable reform model? A reformed TFA could function alongside teacher education, certification, and incentive reforms. In fact, it could even lead reforms (adopting a the best training models, creating a new paradigm for institutional support of teachers, etc). Not all teacher recruitment programs should focus on “elite college students” – what if positive elements of the reformed TFA model spread to other programs? For example, all teacher education/certification programs would benefit from high levels of institutional support for teachers. TFA has the support of the public, private donors, and schools. TFA should harness the political and economic support it already has and change the terms of agreements it has with schools and recruits in unity with broader reform goals.

This may all be a pipe dream. What are your thoughts? Is there mutual exclusivity in this situation: Can TFA coexist with other models of reform? How should we assess mutual exclusivity and determine the opportunity costs of education programs? Does the very presence of TFA eliminate the positive consequences of existing policies or make decision-makers less likely to undertake reforms? Political, economic, and social models for revolution are (always) welcome.

Dr. Strangelove cover

(Image from Wikipedia)

4 Responses

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  1. First, great explanation of opportunity cost and explanation of how to do a cost-benefit analysis.

    But as for one of your points at the end of your post…

    You say: “Many make the argument that TFA increases the propensity of school districts to choose uncertified teachers over certified ones – if this is true, then TFA must be dissolved.”

    My response: Maybe instead of dissolving TFA, administrators at the district and school level should be better educated about why it makes more sense to hire certified versus uncertified teachers. Or change the laws and rules that allow administrators to hire uncertified teachers.

    You blame the TFA, as an organization, for what is ultimately poor management, hiring, and staffing decisions at the district/school level. Don’t attack the tool (TFA teachers) or the tool maker (TFA as an organization) — attack the tool user (district/school administrators who, in your words, rely on “cheap teachers” to staff their classrooms). TFA is providing the human resources to help address the tragic teacher shortage in our most broken schools, and some administrators may take advantage of this to quickly, cheaply, and (maybe) inadequately patch over a teacher need in their own school.

    By your logic — i.e., Dissolve TFA because the organization allows district and school administrators to get away with hiring uncertified teachers — then all tools (e.g., technology, organizations, service providers, etc.) should be “dissolved” if people mismanage them or take advantage of them or use them as shortcuts that result in a sub-optimal experience.

    Some teachers (very few, but still some) rely on videos to “teach” their class, rather than creating and implementing interesting and engaging curriculum. Certainly you wouldn’t argue that all DVD players, VCRs, and TVs should be taken out of the classroom?!

    You also say: “TFA should [be dissolved] if it is a ploy by lobbyists to decrease public spending in education.”

    Do you believe that TFA and lobbyists are somehow political bedfellows? I don’t think this is what you mean, but your implication — that some lobbyists and legislators may point to TFA as a reason why it is unnecessary to provide more government money to fund teacher training programs — is, again, not an effective critique of TFA, but rather an expression of your political disagreement about the way legislators are lobbied to make decisions about funding.

    We can point to sooooo many things where the private sector has provided a complementary or alternative action-source to what the government provides. I don’t think anyone has seriously argued that because of all the money the Gates Foundation has invested in international education and health related causes, that the U.S. Federal Government no longer needs to provide aid. Nor do we say that there is no need for the USPS because FedEx, DHL, and UPS can handle all of our shipping and mailing needs. Similarly, I have NEVER heard the argument that the federal government doesn’t need to fund teacher prep programs because TFA is in existence. And even if such an argument were to be made, it would be a very weak one.

    Your central frustration with TFA seems to be that it has so much political, private, and economic capital… And that this capital could and should be used in a way that prepares teachers like traditional teacher prep programs. My argument is that the very reason TFA has so much capital is because it is NOT like these other programs that you advocate it should emulate.

    jra

    J.R. Atwood

    26 June 2008 at 11:48 am

  2. An Educator’s Guide to Opportunity Cost and Rational Choice Theory, or “How I Learned to Continue Worrying but Advocate for TFA Reform (Instead of Total Dissolution)”…

    educatorblog wrote an interesting post today onHere’s a quick excerptA
    Read the rest of this great post here
    ……

    Vegan Cooking

    5 July 2008 at 4:14 pm

  3. I am veteran teacher from Houston seeking a dialogue with current and past Teach for America teachers regarding a pattern of TFA leaders and alumni in leadership positions promoting conservative ideas and profiting from close relationships with reactionary corporations while presumptuously claiming to be the new civil rights movement. I first became aware of this when a former local TFA Director, now a school board member, recently proposed to fire teachers based on test scores and opposed allowing us to vote to have a single union.

    The conservative-TFA nexus began when Union Carbide sponsored Wendy Kopp’s initial efforts to create Teach for America. Union Carbide’s negligence had caused the worst industrial accident in history, in Bhopal, India. The number of casualties was as large as 100,000, and Union Carbide did everything possible to minimize taking responsibility.

    Ms. Kopp wrote in her book she nearly went to work for the Edison Project, and was all but saved in financial hard times by their managerial assistance. The Edison Project, founded by a Tennessee entrepreneur, was an effort to replace public schools run by elected school boards with for-profit, corporate-run schools. Her husband, Richard Barth, was an Edison executive before taking over at KIPP Foundation.

    In 2000, two brilliant TFA alumni, the founders of KIPP Academy, then joined the Bush’s at the Republican National Convention in 2000. This was pivotal for Bush, since as Governor he did not have any genuine education achievements. These charter schools do great service, but they start with families that are committed to education. They claim they are improving public schools by offering competition in the market-place, but they take the best and leave the rest. What sort of competition is that?

    Superintendent Michelle Rhee’s prescription for improving D.C. schools: close them rather than improve them—and fire teachers rather than inspire them.

    TFA teachers do great work. But better schools are only part of the solution. Stable families are more able to be ambitious for their children than insecure, overworked and struggling ones. We need national health care, a stronger union movement, long-term unemployment benefits, generous college funding, immigration reform, trade policy, freedom for alternative lifestyles and reductions in military spending. Specifically, we need to enlarge the middle class by any means necessary.

    Our society has failed our schools by permitting the middle class to shrink. It’s not the other way around. Economic inequality and insecurity fosters the achievement gap. Its not the other way around. Blaming teachers, public schools and our unions feeds corporate ideology and their power. Corporate domination of politics, and the weakness of counter-balancing forces like unions, are the obstacles to progressive change.

    Ms. Kopp claims to be in the tradition of the civil rights movement, but Martin Luther King would take principled positions—against the Vietnam War and for the Poor Peoples March—even when it pissed off powerful people. His final speech was for striking sanitation workers. His last book argued for modifying American capitalism to include some measure of wealth distribution. I would like a dialogue about what I have written here. My e-mail is JesseAlred@yahoo.com. You as an individual TFA teacher has a responsibility here because your work gives TFA leaders credibility. Its not the other way around.

    JesseAlred

    11 April 2009 at 7:35 pm

  4. Hi! I was surfing and found your blog post… nice! I love your blog. :) Cheers! Sandra. R.

    sandrar

    10 September 2009 at 2:28 pm


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