Monday, April 26, 2010

 

Breaking Even

I had a good discussion last week with a well-meaning professor who wanted to know why the minimum enrollment to run a section is higher than the break-even cost of paying an adjunct.

Her position was that another section doesn't add much marginal cost, and as long as you've paid the adjunct, what's the problem?

It was one of those "where you stand depends on where you sit" moments. I'll make it a multiple choice.

If another section doesn't add much marginal cost, and it generates enough tuition/fee revenue to pay the adjunct, what's the problem?

a. Nothing. The Administration is just unable to do simple math.
b. Nothing. The Administration just hoards the profits and rolls around in them in a locked vault, like Scrooge McDuck.
c. Slippery slope. If department x gets smaller sections, then department y will want them, too. After a while, there's nothing left to pay for the library.
d. Opportunity cost. If room 320 is devoted to a break-even section, it's displacing a larger section that would have met there. The difference is what pays for the library.
e. c and d

The correct answer is e. But that's largely beyond the purview of any given department. If a small psych section displaced a larger history section that would have met there, neither actually sees the conflict directly. Psych just gets its section, and history just gets told the rooms are full. But that doesn't mean the conflict isn't there. (That also explains why we're looser with minima in the summer; when the classroom would otherwise sit empty, the 'opportunity cost' argument becomes moot.)

Since it's impossible to forecast where every little micro-conflict will happen, most colleges (including my own) will set a default minimum enrollment for a class to run. The idea is to keep small classes from crowding out larger ones. Then, every semester, we deal with exceptions and requests for exceptions. It's messy but necessary. (Exceptions for small classes include single sections that are required for a major, 'safety valve' sections in which every other section of that course is full, and classes with facility or accreditation constraints, like Nursing clinicals.) Since students don't usually sign up for just one class, but instead for entire schedules, moving people around at the last minute is incredibly time-consuming and awkward; that's why we can't default to some sort of bidding or overbooking system. We have to get it (mostly) right the first time.

As with any system that uses blunt instruments to reach best-available (as opposed to optimal) solutions, it's clunky. As we get to the last few weeks before the semester starts and we have to make the "go or no go" decisions, there's some level of guesswork involved, and some of it will turn out to be wrong. Most of the decisions are made without regard to Excellence or Virtue or Beauty, just because they have to be. It's reductionist in the way that all scheduling is. But that's not out of indifference, tone-deafness, or malice; it's out of necessity. Scrooge McDuck has nothing to do with it.

Admittedly, that isn't as viscerally satisfying as a story with a clear hero and a clear villain. Break-even propositions rarely are.

Comments:
Agreed, but I would add

c'. Since a CC prof might never have managed the budget for a grant, odds are ze left some direct costs, such as the employer's share of FICA. Lots of people don't even know that exists.

and

d'. There is a pretty good chance the adjunct will incur copying and other indirect charges, such as using the lights in the room.

BTW, our college makes the decision on what courses will "make" regardless of enrollment before registration even begins. We have found that offering those single-section classes on a reliable rotation will build enrollment in those areas.
 
I'm with your prof on course sections that are added later to address increasing demand. One could argue that at some point, the marginal costs of running the college are paid, so adding one more course does not impact those costs, with the exception of the attached salary and benefits.

Although we don't like it, we would rather run an added course at break-even (or slightly less), than turn away students. I also think that it is useful to view a course in the context of the other courses in that discipline. For example, Differential Equations rarely has enough enrollment to make it 'pay'. On the other hand, our pre-college math courses are over-capacity with long wait lists; so my view is that the pre-college courses are paying down the cost of the low-enrollment 'niche' courses.

Of course, there is a potential for the slippery slope argument, but our faculty seem to understand and appreciate it when we agree to run a 'short' course. I have even had a faculty member attempt to bargain with me, along the lines of, "OK, what if I allow 10 over-capacity students into Course A - will you than let me run Course B which is currently 5 students under the minimum? Although it would be a case-by-case basis, I have made such deals.
 
Regardless of people's personal feelings on the issue, you do a good job of illustrating that decisions such as minimum enrollment to run a section of a course are often more complicated and complex than individuals impacted by the issue realize.

The biggest challenge I face at my institution with this issue is that the policy is so vastly different across colleges. One college may set a minimum enrollment of X while another uses Y and yet another uses Z. While there may be compelling reasons for the differences, it's hard as an Academic Advisor to explain to a student why course A they were enrolled in was cancelled even though it had more students signed up for it than courses B, C, and D which they are also signed up for and which are being allowed to run.
 
The good news is that the well-meaning prof came to ask you about this, enabling you to give a constructive reply. That's a lot better than having well-meaning prof stew over it silently, assuming the worst. Kudos on doing a good job setting up open lines of communication so that profs feel comfortable asking you about this.
 
Your scheduling process may be different, but in my experience a low-enrollment course cancellation does not entail a high-enrollment course taking it's place. This is because, by the time it's clear that enrollment is low, it's also too late to add a new section...

So, what you really seem to be talking about is schedule planning, no? In that case, your argument works.
 
Have all the economists stopped commenting?

I expected to read a few comments pointing out that marginal costs are only an appropriate measure once all fixed costs have been covered, and hat there are "average" costs that most likely used for break even analysis, not the marginal costs, etc...
 
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