Measuring the Consumption Value of Higher Education

This article argues that the consumption value of education is an important motivation for educational choice. When controlling for ability, we find that individuals are willing to forego substantial future wage returns to acquire a particular type of higher education. We find that high-ability individuals who attended teachers' college in Norway during the 1960s could have substantially increased their lifetime income by choosing an alternative educational type. Moreover, the ex post price for the consumption value of teachers' college turned out to be even higher than the estimated ex ante willingness to pay for this consumption value. (JEL codes: J24, J31, J33, I21, H89).