On Measurement problems in Education

This piece had been languishing for 3 years. Not particularly insightful, but I need to move on to things I find more interesting at the moment.

The ability to think describes existence; it determines thoughts, actions, participation in society, view of self and of the world. Education is the process that develops perspectives, imparts tools and provides frameworks that are needed for an individual to develop and regulate their abilities. Amartya Sen calls it an enabling factor, though even this rather broad description does not do justice to the central importance that education holds in the world that we live in.

These insights on the importance of education are nothing new and have been acknowledged for very many ages. Hence, universities and schools developed to formalize the methods and mechanisms used to impart education. However, while institutionalization of education is not a modern creation; the interaction between the institution and an individual desirous of getting a education through the market is. Herein lies the construct (primarily with reference to higher education) that shall be presently the object of attention.

Economists and other social scientists often emphasize the role of 'information asymmetry' in workings of the market. The concept is very simple: information about quality of the commodity or service being supplied to potential customers is private to the producer,  or at least it is not available for public consumption. It for this reason that firms (or individuals) go to great lengths to provide assurances of quality to their prospective customers. The financial sector attempts to resolve such problems through credit rating agencies; manufacturing and processing sectors by creating benchmark certifications and offering replacement warranties. 

Aside:  The limitations of private provisioning of such information were exposed during the economic crisis of 2008. The contradictions built into the credit rating mechanism became apparent showing how the sytem could be rigged. Such privately owned rating services are usually paid for by the supplier (directly or indirectly) and thereby the ratings can hardly ever be expected to be based on a fair assessment.

The provision for education in a modern economy, suffers from problems of a similar nature. In societies where the university system has matured over a long period of time (which is not to say that they dont have serious problems of their own), the quality is signaled by perceptions associated with individual institutes or universities. However, in relatively younger systems of education, with new institutions coming up everyday, consumer (students) decisions have to made without the luxury of being able to rely on years of historical performance as measures of quality. Therefore developing mechanisms to convey quality are of far greater importance. To further complicate matters, such markets are characterised by a demand-supply mismatch, whereby there are many applicants than there are positions. So not only do potential consumers suffer from information asymmetry, the intense competition for places might mean that most might not have a real choice in where they get their education from. Given this situation and the importance of education the onus of resolving this issue usually falls with the state. 

The state in its attempts to assure quality is likely to create some system of regulation. In India, there state funded accreditation agencies, along with licensing authorities who are responsible for ensuring the quality of education institutions. Given the enormous demand for education there are plenty of private entrepreneurs willing to set up schools and colleges. But a license-permit regulatory system makes these entrepreneurs potential targets for rent seeking as also potential sources of future employment to be cultivated by bureaucrats at the agencies. The problems are akin to the general malaise that afflicted the pre-liberalisation Indian economy.  

While licensing institutions leads to graft and nepotism, accrediting and rating educational institutions comes with its own set of problems. The process of imparting education does not lend itself well to evaluation. It is almost impossible to generate a list of criteria that can be objectively measured for purpose of evaluation. Education is what would be called a complex process, where following the same recipe twice may not result in the same dish. There are no detailed blueprint of a method that can ensure a high level of learning. Whats worse is there are no concrete outcomes of the process that can be measured. There are many proxies: placements, salary, alumni network. But measuring these is confusing being 'successful' for being educated.  Is someone who became a high school teacher any less educated than an investment banker? This serves to  show that the measurement problems in education production process further complicate the problems arising from information asymmetry.