All grown up and nowhere to go

Singapore Universities are ‘da bomb’

Posted on: February 15, 2008

I read the most ridiculous quote in Today today. See, this is what you get for not paying for quality information, all sorts of rubbish come through.

 “Singapore universities are still a bargain by international standard, especially given the high quality of education.” – NTU Prof

The title of the article is “When hikes don’t matter” because quality is priority in the education business.

And the article went on to say that local education is basically a bargain because compared to foreign universities, despite the fee hikes local unis are a) still cheaper and b) of equal standard.

I will now put forth my CFA-crippled-brained opinion.

 Dear Mr Article Writer

I do not doubt that Singapore universities provide a high quality of education. This is mainly because I am enrolled in one. If I don’t believe that I am getting a high quality of education, then I am either a fool or an angsty rebellious teenager for having enrolled in one (besides lacking in financial capabilities to have applied to an Ivy League).

However, the main reason anyone pays for a University education is to get a good job. I am assuming everyone is perfectly rational and does not go to Uni for fun, joy and laughter alone.

The goal of getting a good job necessitates a high quality of education. However, more than that, it is preferable if the University name sounds cool, exotic or foreign. I call this the Tourist effect.

Imagine you are going on a holiday. We will equate high level of education with high level of holiday enjoyment. As an individual, you might enjoy as high a level of thrills and excitement if you go to Pulau Tekong as if you’ve gone to, say, Tuscany instead.

But when you tell people where you’ve been, what will they be more impressed by, Tekong or Tuscany? (The correct answer is Tuscany, by the way.)

You see, this Tourist effect is very much in force as part of the job hunt. “I went to the States to study” just had a really nice ring to it, even if you went to a community college and have D’s splattered all over your transcript. Whereas our NUSes, our NTUs, our SMUs are just like Pulau Tekong. It is a sad fact of life.

It is erroneous to make a comparison of the price of a local education with overseas education without discounting the Tourist effect.

We can also argue using statistics. We can survey all the investment banks, top law firms, and big popular companies. Question: What is the percentage of local grads occupying senior level positions in these firms?

If I am not wrong, from my interaction with the aforementioned firms, the management are either ang mohs or Asians with ang moh accents. Question: how many ang mohs / Asians with ang moh accents do you see in local unis, excluding the biased subpopulation of exchange students and SPGs?

Conclusion: fee hikes DO matter because

Local uni price = stated price + implied cost of middle-income terminal jobs.
Overseas uni price = stated price + implied discount of ease of getting top-end jobs.

When stated price of local uni comes nearer to stated price of overseas uni, actually the overseas education will turn out to be cheaper!

It amazes me how such brilliance can exude from non-stop drilling of Quantitative Methods in Finance.


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