Posts Tagged 'Higher Education'

Millennial College Students Are Torn Between Open Speech and Protecting the Vulnerable

We recently completed a poll of 1,000 college students on the topic of free speech on campus. Previous postings (here and here) have shown that students are reticent to support controversial speakers on campus and do not support any speakers who might have viewpoints that some students find to be uncomfortable.

In this final post on our poll results, we take a look at some contradictions in our data that demonstrate that today’s college students are torn between a desire to favor a campus that promotes free and open debate and an ethos that makes them want to protect the vulnerable from feeling uncomfortable.

There has been a long-held belief by conservatives that colleges are bastions of liberal thinking and perhaps indoctrination. Our poll results lend support to this viewpoint, as 52% of college students feel their professors tend to be more liberal in their thinking than the nation as a whole while just 23% feel their professors are more conservative:

Compared to the views of the nation as a whole, would you say that your current professors/instructors tend to be:
More conservative in their thinking 23%
About the same as the nation as a whole 25%
More liberal in their thinking 52%

Students tend to express a desire for their professors to be given a wide latitude to express their views and are largely not in support of administrators censoring how professors express their views to students.

Which statement below comes closest to your opinion?
College administrators should closely monitor what professors/instructors teach to make sure all students are comfortable 33%
College professors/instructors should be given a wide degree of freedom to express their views to students 67%

The result below shows that students report that colleges should encourage students to have an open mind to ideas that they may find uncomfortable. At first glance, college students seem to favor an atmosphere of openness on campus.

Which statement below comes closest to your opinion?
Colleges should attempt to shield students from ideas and opinions they may find unwelcome and offensive 25%
Colleges should encourage students to be exposed to ideas and opinions they may find unwelcome and offensive 75%

Millennial college students also recognize that free and open speech is central to university life. For example:

  • Two-thirds (66%) agree that the intellectual vitality of a university depends on open and free expression of ideas.
  • 63% agree that free speech, including controversial speech, is central to college teaching and learning.
  • 57% agree that student-run newspapers have a first amendment right to publish controversial stories without running afoul of college administrators.

That said, this poll also shows that Millennials also hold some views that run counter to the free speech ethos they express:

  • 57% agree that students should be encouraged to report instances of professor bias to administrators.
  • 48% feel that students should be provided warnings in advance to alert them to potentially troublesome readings.
  • 45% feel that colleges should provide intellectual safe spaces, where students can retreat from ideas and perspectives that are at odds with their own.

And, as we discussed in our previous postings, students shy away from permitting almost any type of speaker on campus that could potentially communicate anything that might cause a subgroup of students discomfort.

So, there are some contradictions in our findings that needs explaining. We feel that there is likely some nuance on Millennial opinion. The Millennial college student seems torn between realizing that exposure to ideas counter to their own is essential to their education and a strong ethos of protecting the vulnerable.

Which statement below comes closest to your opinion?
It is more important that colleges stick up for the vulnerable 50%
It is more important that colleges stand up for a spirit of inquiry 50%

This nuance is difficult for Boomer and Xers (who make up most college administrators and professors) to grasp. Older generations grew up not only at a time when free and open speech was held to a higher standard but also at a time where the college/university campus was the nexus of student opinion and influence. Today’s Millennial student has experienced more cultural diversity on campus and has established digital meeting spaces are their nexus for opinion and community. Millennials are exposed to diverse and controversial opinions constantly, to the point where their desire to protect the campus from controversy and discomfort may be a defense mechanism. It is an environment they can control.

What this all means for the university has yet to be seen. But, campus life is changing, and it will be key that the pendulum that is now swinging towards safety and comfort doesn’t swing so far as to limit student exposure to valuable viewpoints and a well-rounded worldview.

Students Are More Likely to Oppose Campus Speakers Than to Support Them

We recently posted a result from an in-depth poll we conducted among 1,000 college students last fall. In this poll we asked students about specific speakers they may or may not support coming to their campus. Among our conclusions was that students largely aren’t supportive of very many speakers – particularly individuals who might be considered to be controversial or present ideas some might find uncomfortable.

In this same poll, we asked students about types of speakers that might come to a college campus. We included speaker types we felt most observers would feel are appropriate as well as speaker types that we felt even the most passionate free speech advocates might question. Our goal was to see where “the line” might be for today’s college students. The answer is the line is very high – students largely don’t want campus speakers at all.

The table below shows the percentage of US college students who would support each type of speaker coming to their campus to speak:

Support
A leader from the Black Lives Matter movement 50%
An advocate for the legalization of marijuana 46%
An elected official with views that are vastly different than yours 22%
A publisher of pornographic videos 21%
An activist who has a different view on abortion than you do 19%
A speaker who strongly opposes the Black Lives matter movement 19%
A politician who is against gay marriage 17%
A speaker who believes that there are racial differences in intelligence 17%
A tobacco company executive 14%
A speaker who is known to have sexually harassed a colleague in the past 11%
Muslim who advocates hatred towards the United States 10%
A speaker who believes that the Holocaust did not happen 10%
A white supremacist 10%

Some interesting conclusions can be made by looking at whom students are willing to support coming to their campus to speak:

  • Even the most highly supported type of speaker (A leader from the Black Lives Matter movement) is only supported by half (50%) of students. Support for any type of campus speaker is tepid.
  • Two types of speakers stood out as having the most support: Leaders from the Black Lives Matter movement and advocates for the legalization of marijuana.
  • It is perhaps troubling that only about 1 in 5 students (22%) support an elected official with views different from their own.
  • Racially insensitive speakers (white supremacists and Holocaust deniers) are the least supported types of speakers.

We can also look at the same list, but this time sorted by the percentage of students who oppose this type of speaker coming to their campus to speak:

Oppose
A white supremacist 68%
A speaker who believes that the Holocaust did not happen 68%
A speaker who is known to have sexually harassed a colleague in the past 67%
Muslim who advocates hatred towards the United States 66%
A speaker who believes that there are racial differences in intelligence 51%
A politician who is against gay marriage 50%
A tobacco company executive 49%
A speaker who strongly opposes the Black Lives matter movement 46%
A publisher of pornographic videos 39%
An activist who has a different view on abortion than you do 27%
An elected official with views that are vastly different than yours 25%
An advocate for the legalization of marijuana 16%
A leader from the Black Lives Matter movement 16%

Here we see that:

  • In general, students are more passionate in their opposition to speaker types than in their support.
  • Speakers with racially insensitive views and those known to have sexually harassed someone are the most opposed types of speakers. Speakers who have sexually harassed are opposed just as much as white supremacists.
  • About half of students oppose politicians who are against gay marriage and tobacco company executives. This is about the same level of opposition as to a speaker who believes there are racial differences in intelligence.
  • About 1 in 4 students would oppose an elected official that has different views than the student.

Because there have been instances of speakers being shouted down and even physically confronted by college students, we posed a question that asked students what they felt were acceptable ways to protest against a campus speaker.

Which of the following actions would you take if you were strongly opposed to a speaker your college had invited to speak on campus?
Disagree with the speaker during a question-and-answer period 25%
Organize a boycott of the speech 22%
Stage a protest outside of the building where the speech is taking place 21%
Host a concurrent speech from a speaker with an opposing view 16%
Stage a sit-in at an administrative building 12%
Physically confront the speaker 8%
Disrupt the speech while it is going on 7%

For the most part, students don’t support any actions if they strongly oppose a campus speaker. While it is encouraging to see that they do not support disrupting the speech or physically confronting a speaker, it is perhaps just as disheartening to see that only 1 in 4 would be willing to disagree with the speaker during a Q&A period. So, not only do students not want most types of speakers, they aren’t willing to step up and do something if a speaker they find controversial does come to campus.

Just as we found when we looked at specific speakers, students seem to be shying away from not just controversial speakers, but also those that might make some portion of the student body uncomfortable. Based on these results, we predict that there will be fewer speakers invited to college campuses in the future and that attendance at these events will decline.

Who is an appropriate campus speaker? Almost nobody!

US colleges face many free speech challenges. Traditionally, colleges have been places where diverse viewpoints are encouraged even if ideas expressed are seen as controversial. But recently, there have been many instances of invited speakers to college campuses sparking protest, being shouted down, and even being physically confronted by students on campuses. It seems that a generational shift is taking place whereby Millennial students are highly concerned about inclusiveness and protecting vulnerable groups from potentially harmful speech. Prior generations of college students (Xers and especially Boomers) seemed to hold the concept of free speech in higher regard and seemed willing to permit more controversial speech on campus.

This is a fascinating issue and we covered it in depth in a poll of 1,000 US college students conducted last fall. This poll tackled a number of issues regarding how today’s college students view the balance between free speech and protecting vulnerable groups. We will be making a number of posts to share the results of this poll, and our first one relates to who today’s college students view as appropriate speakers to bring to campus.

We brainstormed a number of potential speakers, some liberal and some conservative. We listed government officials who, even though they have strong political opinions, we felt most of academia would say have a legitimate right to be heard. And, we listed celebrities accused of some reprehensible acts, speakers who have already generated controversy on college campuses, and foreign leaders considered to be rivals of the United States. Our goal was to see where Millennials draw a “line” – at what point is a speaker so controversial or so offensive that he/she would not have the support of students to come to campus to speak. In total, we listed 24 individuals.

The table below shows the percentage of US college students who would support each speaker coming to their campus to speak:

Person Support
Barack Obama 71%
Bernie Sanders 59%
Joe Biden 48%
Hillary Clinton 39%
Colin Kaepernick 35%
Elizabeth Warren 27%
Donald Trump 24%
Caitlyn Jenner 23%
Paul Ryan 21%
Mike Pence 20%
Louis CK 20%
Chelsea Manning 19%
Bill Cosby 19%
Vladimir Putin 19%
Al Sharpton 18%
Rachel Maddow 17%
Bill O’Reilly 17%
Kevin Spacey 16%
Milo Yiannopoulos 16%
OJ Simpson 16%
Ann Coulter 14%
Kim Jong-un 13%
Steve Bannon 13%
Betsy DeVos 11%
Harvey Weinstein 10%

Some interesting conclusions can be made from whom students are willing to support coming to their campus to speak:

  • Only two speakers, Barack Obama and Bernie Sanders, receive support from a majority of college students.
  • Liberal politicians lead the way – with 5 of the top 6 most supported speakers being leading Democrats.
  • Donald Trump, our current president, is only supported by about 1 in 4 (24%) college students as a campus speaker.
  • Celebrities accused of sexual harassment (Louis CK, Bill Cosby, Bill O’Reilly, Kevin Spacey, Harvey Weinstein) are among the least supported potential speakers.

We can also look at the same list, but this time sorted by the percentage of students who oppose them coming to their campus to speak:

Person Oppose
Kim Jong-un 61%
Donald Trump 53%
Bill Cosby 47%
Vladimir Putin 47%
OJ Simpson 45%
Harvey Weinstein 45%
Mike Pence 39%
Kevin Spacey 34%
Caitlyn Jenner 33%
Betsy DeVos 33%
Bill O’Reilly 28%
Steve Bannon 28%
Louis CK 27%
Hillary Clinton 27%
Milo Yiannopoulos 25%
Paul Ryan 24%
Ann Coulter 23%
Colin Kaepernick 18%
Al Sharpton 18%
Rachel Maddow 16%
Chelsea Manning 16%
Joe Biden 15%
Elizabeth Warren 13%
Bernie Sanders 12%
Barack Obama 10%

Here we see that:

  • Donald Trump is clearly polarizing among college students, with 53% saying they would oppose him coming to their campus to speak.
  • The most opposed speakers are foreign leaders/rivals (Kim Jong-Un, Vladimir Putin), Donald Trump, and celebrities who have been accused of serious crimes (Bill Cosby, OJ Simpson, Harvey Weinstein).
  • Surprisingly, some speakers who have had challenges when speaking at college campuses in the past (Ann Coulter, Milo Yiannopoulos) don’t have high levels of opposition in this poll.

These results are disheartening to those who feel that open expression of ideas is central to collegiate life. Perhaps the key conclusion from these data is how few speakers students support – showing a clear tendency of students to avoid perspectives they may find uncomfortable. This attitude has caused many college administrators to stop allowing potentially controversial speakers on campus as they worry about security and the unrest it may cause. Free speech advocates are likely to feel that today’s students are missing out on an educational opportunity – to listen to different perspectives to help shape a world view.

In either case, attitudes towards free speech on campus are very different than a generation ago – a topic we will be pursuing as we release other data from this poll.

The Cost of Not Going to College Is Probably Not As High As You Think

Each year, there are a number of studies that show the same thing:  there has never been a time when the salary gap between high school graduates and college graduates has been higher. According to Pew, this salary gap currently averages $17,500. The College Board puts the gap at $21,100.The implication seems clear:  stay in school, go to college, and reap the benefits.

However, there is actually a lot of nuance to this story and the true causes of this wage gap are rarely discussed. First, the fact that an average college graduate makes, say $20,000 more than a high school graduate entering the workforce does not mean that if you coax a high schooler who was not going to go to college to attend, he/she will make that much more. In fact, you should expect that particular student to make a much lower wage premium. Why?

The data both Pew and the College Board cite suffers from what researchers would call a “self-selection bias.” In short, high school graduates who enter the workforce immediately after graduation aren’t a comparable base of individuals to those who choose to go to college. The result is an apples-to-oranges comparison that makes the economic value of going to college versus going straight to the workforce to seem greater than it actually is.

To get a true measure of the “college premium” we’d have to run an experiment. We’d take a large sample of high school seniors and assign them to either “work” or “college” randomly. The difference in the “work” and “college” group would be the true college premium, and would be much less than the $20,000 that is claimed. (Of course this experiment could never actually happen!)

Why? Because the high school senior who chooses to college has higher earning potential than the one who chooses to work and would earn more even if he/she did not go to college. Similarly, the high school senior who chooses to work rather than college would be expected to make less than the average that current college students make if he/she chose to go to college.

Another example of this same concept would be the salary figures colleges promulgate. The median starting salary for a Stanford graduate is $61,300 per year. The average starting salary for a 4-year college graduate is $45,370.

Does this imply a Stanford education is responsible for a $15,930 starting salary premium compared to an “average” 4-year college? Absolutely not. To understand the Stanford premium, we’d have to take all incoming college students and randomly assign them to colleges. Then, in four years we can compare the average starting salary of graduates and make a credible claim that the Stanford premium is the difference. It will be much less than $15,930. Why? Because the incoming Stanford student has a potential earning power that is higher than the typical incoming college student. Much of the current “Stanford premium” would be due to this self-selection of the student and not to the education they receive at Stanford.

The information that is put out there regarding the college premium has unintended, but serious consequences. First, it pushes many students to choose college who will not gain the salary premium they expect. Many of these students will take substantial loans, may drop out, and will left in a financial mess that takes much of their adult lives to recover from. It is a little known fact that just 53% of those who enroll in a 4-year college actually end up graduating.

Second, this thinking drives many strong students to go to more expensive colleges. Many don’t realize that the salary premiums they will command likely have more to do with who they are than where they choose to attend college. It is likely that the key determinants of a young person’s success will not be where he/she went to college but more their own talents, hard work, and ambition.

Finally, our political leaders jump on statistics such as the college premium. They perpetuate a myth that all students should go to college, establish programs to make this possible, etc. This has contributed to unemployment among college graduates, declines in starting salaries among those who do, a crisis in middle skills employment, and a mismatch of labor to available jobs.

This is not to say a college education is not a worthy pursuit. In fact, it is a good idea for most, and jobs should not be the sole goal of college. However, we don’t do right by high school students by overstating this gap and having a singular mindset that college is the only path to success.

Whose Job is it to Close the Gap?

Mind-the-Gap

There have been many studies released, from very credible sources, that indicate that a college education clearly pays back. A May 2014 New York Times article indicates that the pay gap between college graduates and non-graduates is widening, even as more students attend college. The College Board has indicated that both individuals and society as a whole benefit from increased levels of education. Pew Research has shown that although the pay gap is increasing, Americans are beginning to question the value of higher education and its affordability.

Today’s colleges face many challenges in helping prepare students for the workforce. As more students attend college and costs continue to rise, higher education institutions will be under increasing pressure to prepare students for the workforce. Gaps in workforce preparedness contribute negatively to employers’ views of graduates, the reputation of colleges, and the well-being of young adults. There is a sense that college curricula are struggling to keep pace with the changing needs of the workforce.

Crux Research recently conducted a study for Chegg which focused on workforce preparedness. We surveyed large samples of students, college faculty, and employers to explore beliefs around accountability and ownership in creating a hirable, attractive, ready-to-work population from U.S. colleges and universities.

This study sheds new light on issues of workforce preparedness, the unique perspectives of faculty and employers, and the need for a new approach to the way faculty and employers work together.

A summary of results of the project can be found at Chegg’s website here.

What has two eyes, one brain, and costs a quarter million dollars to educate?

education-at-work-college-evolution

Publicly-funded education is perhaps one of America’s greatest triumphs. Education has been part-and-parcel to our democracy and the founding fathers realized early that if government was going to be of the people, for the people, and by the people, then the people better be well-educated.

The idea of compulsory public schools goes back to the founding of the nation but actually took some time to gain traction. This is likely because education was and (despite recent history) remains largely a local responsibility. Throughout the 1800’s States passed laws making education compulsory. It took some time for these laws to create a culture where education of children was largely left up to the State, sort of “outsourced” from parents.

In 1912, 72% of America’s children were in school. By 1930, this percentage had reached virtually 100%. I believe this is the main factor behind the dawning of American dominance in the 20th century. There were other factors, but the US had early success in making education compulsory, which gave us a head start in innovation and business. It led to almost a century of leadership of the world’s economy.

Yet, somehow this educational prominence has slipped, or at least has been perceived to have slipped. International comparisons tend to show that our students are not doing well compared to other developed countries. Although many of the prophesies of “A Nation at Risk” have not come to fruition, the concerns expressed more than 30 years ago are resurfacing.

Complaints about the educational system seem to flow with the business cycle and peak at times of economic uncertainty. And we shouldn’t ignore the economics: the resources we spend to educate our children are considerable. My local school district currently spends $12,684 per student per year. Some quick math implies that it cost about $165,000 to educate my child from grades K-12.  Since I have two children, it has cost about $330,000 to get them to a high school diploma. As a parent, I owe our local taxpayers a thank you.But, as a taxpayer soon to not have children in school, I have to be concerned about this level of public investment.

Take the case of a child in the school district where I live, which is a suburban district in New York State.Most students from this district end up going to a 4-year college. For demonstration sake, I picked the closest State college and closest private university to where I live. The annual tuition, room and board, etc. for these students runs $18,055 at the State college and $45,602 at the private university. I am assuming this captures the full cost of what it takes to educate a student for a year at these institutions. These costs might be paid by parents and students, or loans, or grants. For this example, it doesn’t matter where the money comes from.

Using these figures, the total cost of educating a child in our district from Kindergarten until he/she turns the tassel at college is about $237,000 for the State college and $347,000 for the private university. This is what it costs “society” to educate a child from my area, with society being a mix of tax dollars, parent and child money, scholarships, loans, etc.

This is likely an underestimate of the true costs of education. Costs are higher than this calculation for the State college, as they receive government subsidies that help keep their tuition costs down. And, there is an opportunity cost to not having the student in the workforce and contributing to the economic output of the nation until he/she is 21 or 22 years old.

This example shows that there is an understandable economic underpinning to current criticisms of our education system. At a time when we have pressed an increasing base of students to go to college, the college costs have risen substantially. That in itself is not problematic – more problematic is that the costs of college have been growing at a much faster rate than the benefits.

A recent piece by the Wall Street Journal indicates that since 2006, the cost of a 4-year degree has increased by 16.5%. At the same time, starting salaries have stagnated, and I have even seen calculations suggesting first year salaries for college graduates have fallen for the first time in history, when calculated on a real basis.

So, is this a bubble that will have to pop? I guess the definition of a bubble is that nobody really knows we are in one until it punctures. But, it is predictable that education institutions, both K-12 schools and colleges and universities, are going to be under even more intense pressure in the future.

The Paradox of College Rating Systems

It is the time of year when various magazines and services promote their own versions of college rating systems. For many of these publications, the college rating issue is the single most popular issue of the year. And, it is no wonder… with the growth in the costs of college education has come a greater concern on the part of parents and students that there is an adequate return on this investment.

College admissions officials face an interesting paradox. Privately, they loathe these systems, hate their methodology, and struggle to convince their administration that these systems are irrelevant. Publicly, though, they do everything they can to improve their rankings and broadcast them loudly if they like where they ended up.

These rating systems are fundamentally flawed. That is a strong statement. By fundamentally flawed I mean that they measure things of little relevance to a parent or a child who is evaluating colleges, which presumably, is their raison d’etre. Perhaps of even greater concern is that colleges themselves typically don’t measure what is actually important, in terms of the quality of undergraduate education they are providing.

It is a fairly basic principal in business that the efficiency of a system is measured by its output divided by its input. In other words, it is the difference in quality in what they system yields and what it takes in that indicates its quality. This is termed “value-add” in many contexts.

This was brought to my attention by Ronald Yeaple, my faculty advisor when I was an MBA student (and among the best teachers I’ve ever encountered) many years ago.  He stopped by to re-connect and we discussed a book he had recently written called “Does It Pay to Get an MBA?” One of the arguments he presents in this book is that MBA programs can be evaluated in a fairly straightforward manner. For better or worse, a primary reason people choose to get an MBA is to further their careers and improve their salary prospects. So, starting salaries or salaries a few years out are effective “output” measures for MBA graduates.

Most business school rating systems take this into account and include salary information in their ratings formulas. But, they only include half of what needs to be done to measure the efficiency of a system. It is no surprise that the business schools that come to the top of these lists every year happen to be the ones that cost the most to go to and yield the highest salaries.

But, these programs also attract the best and the brightest. This begs an important question:  is it the program or the student that matters? Yes, Harvard and Stanford have high starting salaries for the graduates of their MBA programs. But, is this because of a high value-add experience at these institutions, or is it driven more by the quality of student they attract?  In other words, would the student Harvard attracts have garnered a similar salary if he/she graduated at other, perhaps less esteemed and less expensive business schools?

It isn’t too much of a stretch to state that a student that gets into a top notch program was likely to do very well regardless of their MBA school choice. The issue is how to measure this. Fortunately, there is an objective measure of the quality of an incoming MBA student. It isn’t perfect (few measures are) but it is widely accepted:  the GMAT scores of the student.

So, the efficiency of an MBA program can be measured by dividing its output (salary information) by its input (GMAT score of the student). This is a measure of the value add of the institution – what it has added to the student beyond what the student brings to the program.

Ron Yeaple did this for MBA programs… in an inventive way.  He took the average GMAT score of a class year of MBA students for all the MBA programs in the country and used it as a predictor (independent) variable in a regression analysis. His dependent variable was the starting salaries of graduates of the program.

As you can imagine, there is a positive relationship between the two. Business schools with higher incoming GMAT scores tend to have higher starting salaries. Those with lower GMAT scores tend to have lower starting salaries.

But, the interesting part is all MBA programs don’t align perfectly on the regression line. Some are above it and some are below. Those above the regression line are those whose students are earning more as graduates than their incoming GMAT scores would predict. Those schools below the line are underperforming – their students are earning less than their GMAT scores would predict. When Ron ranked the schools by their deviation from the regression line, the list did not correspond to any list I have seen. This was a beautiful analysis, and reminds me of why I found Ron to be such an outstanding professor.

It is more challenging to implement this value-added concept to undergraduate education. For one thing, a proper outcome variable is harder to define. How do we measure the output of a college? There is more to a quality institution than the salary of their graduates. But, in today’s world it has to be an important part of the outcome measure.

Outcome measures that don’t somehow correct for the incoming quality of the student base can’t do an adequate job of ranking institutions. If you ranked colleges by the mean SAT scores of their incoming freshman you would have a list that looks a lot like the lists that are published each year. How does that say anything about the quality of the education a college is providing?

Time is Money; Money is Time

The most interesting call I ever received as a result of a poll we conducted was from a college student. We had released a data point demonstrating that college students have an enormous amount of uncommitted, free time — 8.5 hours a day on average to be precise. We defined discretionary time as time students are not sleeping, going to class, studying, working out, commuting, or working at a paid job. What is left is time that is up to the student how to use.

The college student called to tell me how this data point must be wrong, because all the college students she knew were incredibly busy. After mentioning that she must be hanging with a different crowd of people than I hung with in college, I told her to call me back in 10 years when she had a career, a spouse, a couple of kids, and a house to maintain. I suggested it is likely a matter of perspective and how you view your discretionary time, and that perhaps time that she considers “obligations” our researcher’s eyes classify as discretionary.

In the context of many decisions we make, we trade off the concepts of “time” and “money.” In the short-run, both are fixed commodities. In the long run, our financial situation may change for better or worse and our concept of time may change even though each day remains at 24 hours.

Our discretionary income follows a well-known path in our lifetime. It starts at zero when we are born, grows to a modest level as teenagers, tends to level off through the college years, grows considerably in our working years, and then falls off in retirement.

Discretionary time follows a different pattern. It starts out very high, moderates in the school years, grows considerably in the college years, and then pretty much falls off a cliff as individuals are raising their own families and building their careers. Discretionary time then moves upwards during the empty-nester time frame, and then is maximized in retirement. Note that we define discretionary time as “uncommitted” time – time that you get to choose how to spend.

The graph below illustrates how time and money progress over our lifetimes.

Time and Money

The interesting part of this for marketers is that “time” and “money” are often used to “buy” each other. We can buy more discretionary time by outsourcing aspects of our lives. I don’t change my own oil, plow my own driveway, or iron my own shirts. In all these cases, I value the time saved by not having to do these things more than the money it cost to outsource them.

This relationship goes the other way as well. We can use “time” to save “money.” I’ll sometimes spend hours on the Internet to find the best price for a flight or a hotel room. I’ll drive an extra 15 minutes to a grocery store because something I like is on sale there and not at the store closer to my home.

Look again at the graph above. The most interesting life stages are the ones where there is a big gap between the time and money lines. An obvious place where this happens is the college years. This is a time frame when consumers have relatively little discretionary income, but relatively high discretionary time. This concept is why for years we have been saying that college students are pretty much the most savvy consumer group out there. They are smart (hey – they are in college!), highly connected with each other, necessarily frugal with their funds, and have enormous amounts of time to research products and prices. But, they are more than cheap customers who have a lot of time to find the best price. They emerge as adult consumers, and lifelong associations with brands often start in the college years.

Another interesting point on the graph is at mid-career (30’s-40’s). This is the point where there is the largest gap between discretionary income and discretionary time. So, this is the life stage where we most see consumers trading money for time. Price sensitivity tends to be at its lowest during this time frame.

Money is time. With money I buy for cheerful use the hours which otherwise would not in any sense be mine. — George Gissing