Measuring the consumption value of higher education

The consumption value of education is an important, but rather ignored factor behind the individual's educational choice. This paper suggests a method for measuring the consumption value of education in a compensating differentials framework when the ability bias is corrected for. As an example, the willingness to pay for the consumption value of attending teacher's college during the 1960's is estimated on unique Norwegian panel data. The ex-ante price of the consumption value of teacher's college is estimated to be 38 % of the present value of the individual's potential lifetime income. The ex-post price of this consumption value is for the same individuals estimated to be about 46 % of the present value of the potential lifetime income